The Laws of Capitalism Episode 2: Coding Debt

The question is not just how the law codes debt, but also why.

Prof. Pistor examines how the law has accompanied the evolution of negotiable debt instruments, from the simple IOU, to bills of exchange in Medieval Genoa, to securitized assets in the modern day and on to derivatives. She examines the securitization of mortgage debt in the modern United States in the lead-up to the financial crisis of 2008. The legal code has been essential in the transformation of humble IOUs into elaborate financial contracts, and the creation of an entire finance industry.

First Aired on The Institute For New Economic Thinking,

Shared via Creative Commons.