What’s Inside America’s Banks?

The Atlantic -- Frank Partnoy is a law and finance professor at the University of San Diego and the author of Wait: The Art and Science of Delay.

The financial crisis had many causes—too much borrowing, foolish investments, misguided regulation—but at its core, the panic resulted from a lack of transparency. The reason no one wanted to lend to or trade with the banks during the fall of 2008, when Lehman Brothers collapsed, was that no one could understand the banks’ risks. It was impossible to tell, from looking at a particular bank’s disclosures, whether it might suddenly implode. (Full Story