Nobel economist casts doubt on crisis-prevention plans.

One of the world's leading economists has questioned the ability of national governments to interpret market behaviour that could lead to another global financial crisis.

Talking exclusively to FM at the European Finance Association conference in Lugano, Switzerland, Robert Shiller, a Yale professor who won 2013's Nobel prize for economics, said they were "especially uncomfortable" at identifying "bubble thinking in important financial institutions".

He said: "We had a market crash that's kind of analogous to an aeroplane crash. Suppose that a new design of aeroplane crashes a few times: what are politicians going to do about that? They can't figure out why it's crashing."

Shiner pointed out that, although the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 had given the US Financial Stability Oversight Council the power to designate systemically important financial institutions, "it hasn't named very many yet. It's not clear that this system will work wonderfully. There is evidence that financial interests are lobbied much more aggressively than...

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