title: The Fall of the House of Credit: What Went Wrong in Banking and What Can Be Done to Repair the Damage?
author:  Alistair Milne 
description: "The Fall of the House of Credit is a horror story, worthy of Poe, about the origins and impact of our ongoing financial and economic nightmare. A very easy and highly insightful read, for both layman and professional, the House of Credit offers a way out of our deep financial pit that's novel and that may actually work!" - Laurence J. Kotlikoff, Boston University<br /><br />"This book is most welcome: among the crowd of Cassandras, it gives an optimistic, contrarian view of the crisis. Maybe after all the financial system is not so corrupt and dysfunctional. Alistair Milne gives very precise arguments to sustain his views that unreasonable pessimism has followed a long period of 'irrational exuberance'. One may disagree with some of the views defended in this excellent book, but the conclusion that public authorities have a fundamental role to play in restoring confidence should be unanimously accepted." - Jean-Charles Rochet, Toulouse School of Economics<br /><br />"An important alternative perspective on the subject, and an excellent explanation of the issue too. Very good indeed." - Evan Davis, broadcaster and economics commentator<br /><br />"This book explains in clear terms how and why the banking crisis that is dragging the World's economy happened. Milne's argument that psychology, culture and herd behaviour contributed first to the bubble, then to the bust is a powerful one, rooted in the tradition of Kindleberger and Minsky. The author proposes a return to the basics of credit - rooted in the latin word 'credere' - which implies a restoration of trust in banks and confidence in credit instruments. The book is written for a general audience, and the straightforward language and reasoning are a refreshing change from the complexity in the design of structured credit instruments and the models upon which they were constructed, that proved so ill suited to indentifying and managing systemic risk." - Professor Rosa Mara Lastra, Professor of International and Monetary Law, Centre for Commercial Law Studies, Queen Mary University of London<br /><br />"Alistair Milne's take on the US credit crunch is a haunting twenty-first century saga of silent bank runs on shadow banks. There may be no great villains or heroes in this tale, where securities markets go into deep freeze and a reluctant Lender of Last Resort has to carry the whole inter-bank market on its shoulders! But it offers a persuasive account of how innovative banking can go off the rails." - Marcus Miller, University of Warwick<br /><br />"If you want a serious, clear and authoritative guide to the crisis, this book is as good as it gets. Milne writes extremely well, both in his prose style and in his clarity of exposition of complex issues [...]. The author not only knows his CDO from his ABS but can ensure that you will too. He moves comfortably between macroeconomic issues of global imbalance and the microeconomics of securitisation, regulation and risk management within the financial system." - John Kay, Management Today<br /><br />"[Alistair] Milne's contribution to the debate is clear, insightful, contrarian and unapologetically positive, and stands above many similar books because it marries rigour with accessibility." - The Business Economist
zlib_text: We heard from the chairman of the Federal Reserve that unless we act the ﬁnan-
  cial system of this country and perhaps the world will melt down. . . . There was 
  complete silence for twenty seconds. The oxygen left the room. Chairman Bern-
  anke said, “If we don’t do this tomorrow, there won’t be an economy on 
  Monday.”
  Senate Banking Committee Chairman Christopher Dodd on a meeting of 
  legislative leaders with Bernanke and Secretary Paulson in Speaker Nancy 
  Pelosi’s ofﬁce on September 17, 2008 (interview with Charlie Rose,  
  November 26, 2008)
  These bad loans have created a chain reaction and last week our credit markets 
  froze – even some Main Street non- ﬁnancial companies had trouble ﬁnancing 
  their normal business operations. If that situation were to persist, it would 
  threaten all parts of our economy. . . . We must now take further, decisive action 
  to fundamentally and comprehensively address the root cause of this turmoil. 
  And that root cause is the housing correction which 