Simon Johnson and Corey Klemmer

SIMON JOHNSON, A 2024 NOBEL LAUREATE IN ECONOMICS AND A FORMER CHIEF ECONOMIST AT THE INTERNATIONAL MONETARY FUND, IS A PROFESSOR AT THE MIT SLOAN SCHOOL OF MANAGEMENT AND THE CO-AUTHOR (WITH DARON ACEMOGLU) OF POWER AND PROGRESS: OUR THOUSAND-YEAR STRUGGLE OVER TECHNOLOGY AND PROSPERITY. COREY KLEMMER IS A FORMER POLICY DIRECTOR AT THE SECURITIES AND EXCHANGE COMMISSION.

The impending reduction in equity requirements resulting from a deregulatory push in the US will result in substantial additional risk to America's financial stability, say the writers.

The Federal Reserve’s other problem

The proposal by US regulators to loosen banks’ equity requirements has ‘financial crisis risk’ written all over it