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Harford traces the 2008 financial crisis not to greedy bankers (the popular narrative) but to a shadow banking system that grew outside regulatory oversight precisely because regulation made traditional banking more expensive.
Canon
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Harford traces how each safety mechanism added to the financial system (ratings agencies, insurance, diversification) became a source of false security that enabled more risk-taking — the hedonic treadmill of financial safety.
Highlights
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Regulation pushes risk to where it's invisible — shadow banking grew because regulated banking became more constrained
Harford shows that stricter bank regulation didn't reduce financial risk — it moved risk to unregulated institutions (shadow banks) where it accumulated unseen until the system collapsed.