Friedman: Absolute regulatory rules fail in a non-linear financial world
Manny Friedman · Manny Friedman – Non-Linear Financial Systems (Capital Allocators, EP.61) · Jul 23, 2018 · at 13:20
Manny Friedman, co-founder and CEO of EJF Capital, explains why central bankers and financial regulators cannot rely on rigid, static rules.
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“The most important thing to keep in mind that the world is not linear, it's non-linear. So you know, I talk to different people who are Federal Reserve Board Governors, and over and over again, the lesson we've learned Not once, not twice, three times, four times, is this is a non-linear world. Therefore, don't try to have any absolutes. Try to adjust constantly to the changing situation. It's almost a Bayesian mathematic concept across the board, and that's the basic regulatory lesson, is in a massively changing world, you can't have these absolutes. They don't work.”
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