Must-Read: Axel Weber (2013): Reconstructing Macroeconomics: “In Davos, I was invited to a group of banks…

…Deutsche Bundesbank is frequently mixed up in invitations with Deutsche Bank. I was the only central banker sitting on the panel. It was all banks. It was about securitizations. I asked my people to prepare. I asked the typical macro question: who are the twenty biggest suppliers of securitization products, and who are the twenty biggest buyers. I got a paper, and they were both the same set of institutions…. I said: ‘It looks to me that since the buyers and the sellers are the same institutions, as a system they have not diversified’. That was one of the things that struck me: that the industry was not aware at the time that while its treasury department was reporting that it bought all these products its credit department was reporting that it had sold off all the risk because they had securitized them. What was missing… is that finance and banking was too-much viewed as a microeconomic issue that could be analyzed by writing a lot of books about the details of microeconomic banking…. The whole view of a systemic crisis was just basically locked out of the discussions and textbooks…
http://delong.typepad.com/sdj/2013/04/reconstructing-macroeconomics-exchange-mervyn-king-ben-bernanke-olivier-blanchard-axel-weber-larry-summers.html