Richard Bookstaber

RICHARD BOOKSTABER is a Wall Street insider and outspoken critic of many of today’s financial practices who predicted the current economic meltdown. He was recently named a senior advisor to the SEC.


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Author, Economy


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RICHARD BOOKSTABER is a Wall Street insider and outspoken critic of many of today’s financial practices who predicted the current economic meltdown. He was recently named a senior advisor to the SEC.

Called "one of Wall Street's rocket scientists" by The New York Times, Bookstaber is the author of A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation, a book that pinpointed the market weaknesses that spun out of control to create today’s financial crisis. A Demon of Our Own Design ranked number one on Amazon in finance and was selected as a finalist for the prestigious Loeb Award.

He was named to this year’s Conde Nast Portfolio list of top 25 technical innovators, joining the ranks of  Steve Jobs, Jeff Bezos, Jeffrey Katzenberg and Eric Schmid, and he has testified in the House and Senate, calling for greater transparency and improved regulation for Wall Street long before it was fashionable.  
 

Reviews of his book include:      

"Bright sparks like Mr. Bookstaber ushered in a revolution that fuelled the boom in financial derivatives and Byzantine 'structured products.' The problem, he argues, is that this wizardry has made markets more crisis-prone, not less so. It has done this in two ways: by increasing complexity, and by forging tighter links between various markets and securities, making them dangerously interdependent."  – The Economist
 
"Like many pessimistic observers, Richard Bookstaber thinks financial derivatives, Wall Street innovation and hedge funds will lead to a financial meltdown. What sets Mr. Bookstaber apart is that he has spent his career designing derivatives, working on Wall Street and running a hedge fund." – The Wall Street Journal 
 
"Mr. Bookstaber is one of Wall Street's 'rocket scientists--mathematicians lured from academia to help create both complex financial instruments and new computer models for making investing decisions. In the book, he makes a simple point: The turmoil in the financial markets today comes less from changes in the economy--economic growth, for example, is half as volatile as it was 50 years ago--and more from some of the financial instruments (derivatives) that were designed to control risk." – The New York Times

"I cannot recommend this book too highly. It is a clear exposition of what the combination of derivatives, leverage and hedge funds can do to the markets. In short, A Demon of our Own Design is a guide to the dangerous financial markets we have created for ourselves by the clever innovations of structured finance, derivatives, credit default swaps and other newfangled products that are a mystery to the ordinary investor and even plenty of the sophisticates in the investment business. To understand the demonic risks we're taking, read this book." – Forbes.com

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