Abstract
The financial crisis of 2008 revealed the fragility of financial systems. One cause of that fragility may have been herd behavior on the part of financial market participants that had all adopted common behaviors and investment strategies. Evidence for such behavior is provided by former Citigroup CEO Chuck Prince’s comments about investing in mortgage-backed securities, including sub-prime loans:
When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing. (Financial Times, July 9, 2007)
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Author information
Authors and Affiliations
Copyright information
© 2013 Thomas I. Palley
About this chapter
Cite this chapter
Palley, T.I. (2013). Herd Behavior: Safety in Numbers. In: Financialization. Palgrave Macmillan, London. https://doi.org/10.1057/9781137265821_6
Download citation
DOI: https://doi.org/10.1057/9781137265821_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-46829-1
Online ISBN: 978-1-137-26582-1
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)