The title of this book is "Financial Crisis". Its subtitle is "causes, context and consequences". It answers the great question as to the sources of the crisis, its development and its solutions. Before reading this book, my understanding was weak on the topic of credit default swaps. This problem has now been resolved! It was probably the best section I've read in any finance books. Elsewhere this book's clarity is equally evident and it is very readable. The preface says that it is aimed at general readers and students. Certainly for this reader, it more than fulfilled expectations.
This is a fairly decent attempt at uncovering the causes and consequences of the ongoing financial and economic crisis. It's intended both for the general reader, a well ias for an academic audience. For many people it will help with their understanding of the arcane nature of credit default swaps etc which are a major part of the story. It's generally well-written, though there is a lot of repetition. There are graphs which don't have any source, so we aren't told where the data comes from. Any student pulling that track would be penalised, so it's really unforgivable for a professor to do that!! My biggest criticism is that in talking about causes, the author hasn't put the financial crisis in any wider economic/political context. He refers very briefly to de-regulation of finance, but that itself was part of the bigger picture of the rise of neo-liberal thinking from the 1980s onwards. Abandoning exchange controals, Big Bang in the City, flexible labour markets, privatisation etc - in sum, the whole ideology that free markets deliver wealth and happiness is central to neo-liberalism, which ushered in the age of globalisation. And now that we are part of a globalised world, the failure of the financial sector poses huge risks, at the same time as it makes solutions of the problem that much more difficult.
This book is very readable and presents a fair assessment of how the crisis developed and offers solutions too.
Students, and general readers coming to the topics of finance or economics for the first time are given a good introduction to such issues as externalities, monetary policy, fiscal policy, the practice of banking, moral hazard, lender of last resort status, bank lending criteria, how booms and busts develop, finance theory and economic theory. So friendly is the presentation that readers might well be attracted to the great masters of these topics. But their exposition is unlikely to be as clear as here.
There is also a very good chapter on credit default swaps. Three chapters are devoted to mini-case studies of bank failures in the USA, UK and the rest of Europe. There is an excellent chapter comparing and contrasting this crisis with the Great Depression and an equally valuable chapter containing advice to governments, banks, regulators, borrowers and academics. Some of the author's advice has already been implemented. The recent crisis is a big topic. The author covers it really well in about 300 pages. It's so well written that I could happily have read another 100!!
You won't find a better text on the crisis of 2007/2008.