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Opinion

Slapped by the Invisible Hand, the Panic of 2007: Wise after the event

Last month, an email landed in Euromoney’s inbox from Gary Gorton, professor of management and finance at Yale School of Management. Publicizing his new book, Slapped by the Invisible Hand, the Panic of 2007, Gorton explains how the securitized banking system stood at the heart of the current financial crisis. Gorton describes himself as an authority on banking panics and the book comes weighed down by glowing reviews from the great and the good of the academic world.

In pushing his credentials, the professor includes a mysterious nugget of information: "As the crisis unfolded, he was working inside an institution that played a central role in the collapse. Thus, this book presents the unparalleled and invaluable perspective of a top scholar who was also a key insider." But strangely Gorton does not reveal the name of the institution that provided him with this insight. A trawl through his website reveals an impressive academic résumé together with roles at the Federal Deposit Insurance Corp, Federal Reserve Bank of Philadelphia and the Bank of England. But he also reveals that he is a former member of the Moody’s Investors Service academic advisory panel. Now why would anyone want to keep that quiet?

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