The financial system, always important, has come into public consciousness to a greater extent than any time since the Great Depression. The financial crisis was immensely expensive. Perhaps 10 million homes may go into foreclosure as a result. House prices declined to the point where almost one-quarter of homes were worth less than the mortgages on the property. The unemployment rate doubled and millions of people lost their jobs. Median household wealth fell by 25 percent from 2007 to 2009 for a loss of about $ 17 trillion. Real median income in 2010 fell to its lowest level in 13 years, and the poverty rate rose to its highest level in 17 years. Graduating students have difficulty finding appropriate work. While there has been a slow but steady recovery, much of this damage might have been avoided, or at least mitigated by better governance, risk management, and better management generally in both the public and private sectors. Moreover, as can be seen in my 1991 book about government-sponsored enterprises such as Fannie Mae and Freddie Mac, many of the financial system’s vulnerabilities have been apparent for many years.
Why Some Firms Thrive While Others Fail: Governance, Management, and the Financial Crisis
– Oxford University Press, 2012
“Tom Stanton’s book should be high-priority reading for senior managers and policymakers. Careful consideration of the well-reasoned arguments in this book will necessarily be part of any serious effort to reform our financial regulatory system, strengthen firm governance and risk management, and promote greater overall financial stability—all critical prerequisites to assuring a strong and resilient economy, and rising standards of living, over time.”—Richard Spillenkothen, former director of Banking Supervision and Regulation, Board of Governors of the Federal Reserve System
Government Sponsored Enterprises: Mercantilist Companies in the Modern World
– AEI Press, 2002
A book review in Public Budgeting & Finance calls this book “authoritative” and “an indispensable tool for the public finance professor,” winter 2003, pp. 114-116
This book is available to download from this site as a pdf file: http://thomas-stanton.com/wp/wp-content/uploads/2012/06/GSEs-mercantilist-companies-AEI-press-2002.pdf
A State of Risk: Will Government Sponsored Enterprises be the Next Financial Crisis?
– HarperCollins, 1991
Concerns expressed in this book helped lead to enactment of several pieces of legislation to improve oversight of the safety and soundness of government sponsored enterprises and set new capital standards for their operations. The book also presents for the first time (at pp. 181-2) the idea of contingent capital that currently is the subject of policy deliberations as a part of financial reform.
An independent scholar writes:
“…perhaps the most effective advocate for safety and soundness regulation has been a private individual: Thomas Stanton…Stanton’s 1991 book State of Risk and his personal lobbying were influential in the legislative process leading to the passage of the [1992 Federal Housing Enterprises Financial Safety and Soundness Act].” Jonathan G.S. Koppell, The Politics of Quasi-Government, Cambridge University Press, 2003, p. 107.