Financial crises are not accidents. They are political choices.

A new paper argues that financial crises are not just technical failures, but a direct result of political decisions. Governments often shape financial rules to benefit powerful groups, which makes the system vulnerable and ensures crises keep happening.

For a long time, many thought financial crises were like natural disasters: unpredictable, unavoidable. This paper says they are more like a recurring design flaw, built into the system by political choices. It means that understanding financial instability requires looking at who benefits from the rules, not just how the rules work.