Book Release: Unfinished Business

Tamim Bayoumi, International Monetary Fund, presented the findings of his new book, Unfinished Business: The Unexplored Causes of the Financial Crisis and the Lessons Yet to be Learned, on November 2, 2017 at the Peterson Institute.

In Unfinished Business, Bayoumi explains how the euro crisis and US housing crash were parasitically intertwined. Starting in the 1980s, policy errors cumulated that undermined the stability of both the European and US financial sectors. Bayoumi highlights the catalytic role played by European mega-banks that exploited lax regulation to expand aggressively into the US market and that financed unsustainable bubbles on both continents. In Bayoumi’s analysis, US banks increasingly sold subpar loans to underregulated European and US shadow banks, and when the bubbles burst the losses whipsawed back to the core of the European banking system. Unfinished Business provides a much-needed, fresh look at the origins of the crisis, concluding that policymakers are still ignorant of what needs to be done both to complete the cleanup and to prevent future crises.

Bayoumi is deputy director of the Strategy, Policy, and Review Department at the International Monetary Fund. He wrote Unfinished Business while he was a visiting fellow at the Peterson Institute from November 2015 to October 2016 and on leave from the International Monetary Fund. Since joining the Fund in 1988, he has participated in surveillance teams on the United States, Japan, and Canada and led the division that produces the World Economic Outlook and the division responsible for Fund analysis of exchange rates and the development of large macroeconomic models. More recently, he has been involved in overseeing the Fund’s surveillance strategy.