Bubbles are an enduring feature of financial and commodity markets. But it is when they are driven by debt that their bursting becomes dangerous * The best book I’ve read on financial bubbles is William Quinn and John D. Turner’s … Continued
China’s growing nuclear weapon capability risks overturning the relative stability of nuclear deterrence based on only two adversaries * Chinese author Liu Cixin’s novel The Three-Body Problem was an international best seller, and was later turned into a really interesting, … Continued
Selling shovels instead of trying to find gold is an old piece of wisdom about booms and bubbles * It’s a cliché about booms and bubbles that you can probably more dependably make money from selling shovels than actually finding … Continued
Real assets are the assets that companies seek to acquire, to build and to invest in. Financial assets are the resources that they raise to allow that to happen. The distinction underpins what we call corporate finance – the financing of corporations. * When economists … Continued
Latest data show that the US dollar remains the dominant trading currency globally, and is still the pre-eminent foreign reserve currency, though slowly losing ground, mainly to other developed country currencies. * Perhaps the question I have been asked most … Continued
A particular case of asymmetric information is where one person, who we call the principal, wants to get another person, who we call the agent, to do something on their behalf. This situation is known as the principal-agent problem, or more simply … Continued
Asymmetric information is where two people doing business together have different levels of information about something important to the transaction, meaning that one may be able to take advantage of the other. It is very common in economic life. * Information is … Continued
The new Shanghai Cooperation Organisation development bank will be the latest addition to China-sponsored new financial institutions. * At the September 2025 meeting of the Shanghai Cooperation Organisation (SCO) Chinese President Xi Jinping announced, alongside the Global Governance Initiative, the … Continued
On 22 July 2025, the UK government announced that Sizewell C new nuclear power projects reached final investment decision (FID). A look at what has been announced contains some surprises and prompts questions. Comments and corrections are most welcome. * … Continued
Ahead of teaching corporate finance each year, I like to try to explain what a corporation actually is. * A corporation is a particular way of organising economic activities. What is called a corporation in the US is called a … Continued
Climate change is a systematic risk * In the standard theory of portfolio diversification, we divide risk into systematic and idiosyncratic or diversifiable risk. We argue that idiosyncratic risks can be diversified away, so there is no market reward for … Continued
Each year on the Master of Finance core course on Financial Institutions and Markets, I do a session on the Great Financial Crisis of 2007-09. One thing I emphasise is the many different causes of this highly influential event, which … Continued
Nuclear has a role to play in providing reliable carbon-free electricity, but in the US and Europe it is likely to be too expensive to have more than a small role. * As I have written two books about nuclear … Continued
Debt rating agencies have no particular expertise or special information on sovereign debt, especially for developed economies, so their views don’t matter * News that Fitch downgraded the US sovereign debt rating from AAA (the highest rating) to AA+ (the … Continued
Climate change involves systemic risk, so it’s not possible to insure against, or diversify away the risk. * Over the years I have sometimes heard investors talk of insuring their portfolios against climate change risks. A group of students once … Continued