Restoring Confidence in the Financial System (eBook): See-Through Leverage: A Powerful New Tool for Revealing and Managing Risk

Synopsis

Restoring Confidence In The Financial System' is a ground-breaking book in which a top mathematician and an experienced City banker explore how confidence in the global financial system was destroyed by the current banking crisis. The authors then show how a radical and new but easily understood measure of risk, revealed here for the first time, can prevent another such bubble from ever happening again. This new measure, called see-through leverage or STL, can be used to restore faith in the financial system by allowing a rapid means of differentiating between potentially toxic and healthy 'AAA'-rated securities. Armed with STL, investors, rating agencies and regulators alike can cut through the complexity of economic modeling to the nub of the problem: leverage.