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By James Blume In 1692, the summer of the Salem Witch Trials, the colony of Massachusetts finalized its invention of modern currency. For the first time in history, a paper currency with no intrinsic value or credible promise of convertibility was voluntarily used in commerce. The Massachusetts paper “bills” were…Read More

By Itay Goldstein and Yao Zeng Last year’s Nobel Prize in Economics went to Douglas Diamond and Philip Dybvig for their pioneering illustration of bank runs. In a nutshell, banks use investors’ liquid deposit money to invest in illiquid projects like factories and houses. If depositors expect other depositors to…Read More

By Peter Conti-Brown The collapse of Sam Bankman-Fried’s FTX empire – and his subsequent arrest in the Bahamas in response to a request from the US Department of Justice – has dominated regulatory discussions about crypto, finance, and much else. But as tumultuous and distracting as the FTX drama has…Read More

By Felix Nockher The separation of ownership and control allows shareholders to diversify their portfolios and firms to undertake value generating projects regardless of their level of idiosyncratic risk. However, the universal push for diversification often means that shareholders do not bear sufficient risk to incentivize them to monitor the…Read More

By Kaleb Nygaard From evenings as the haute cuisine home chef, to the extra early arrival time at the airport, to the three days dedicated to drilling before each FOMC press conference, Janet Yellen is, at heart, an eager and anxious preparer. Her time management and attention to detail manifested…Read More

By Max Harris In 2014, during the centenary of the First World War, Her Majesty’s Treasury announced that Britain would repay its outstanding debts from that tragic conflict. The Allies had long since defeated the Kaiser, but Britain was still spending millions of pounds in interest every year on those…Read More

By Bradford (Lynch) Levy By most accounts, the past decade has heralded a new age in retail investing—by eliminating commissions retail brokers have “democratized finance.” In place of commissions, retail brokers now rely on payment for order flow (PFOF) to drive revenue. While the elimination of commissions sounds great, there…Read More

Welcome to the blog of the Wharton Initiative on Financial Policy and Regulation (WIFPR). This post will introduce you to WIFPR, its mission, its staff, and will explain the blog’s purpose and range. WIFPR was founded by Peter Conti-Brown and Itay Goldstein in 2021 to serve as the leading forum…Read More