The Government has recently proposed that the Bank of England should take on the primary responsibility for macro-prudential regulation in this country (see this thoughtful appraisal). Such significant shake-ups in our fundamental financial (and political) institutions do not happen frequently – they are made possible only by crisis. So we do not have repeated opportunities to get them right. We have one shot. This article is a personal ‘think-piece’, a sketch of how to try to ensure that we get this matter right.
The recent banking crisis has surely shown that banks that are ‘light-touch’ regulated will invariably end up taking ever-greater risks, in pursuit of ever-greater profits. Such endemic risk is not basis for a secure real economy. Thus I have argued previously that there is a case for the banking sector to be genuinely nationalised (i.e. not run at arms-length), on a long-term basis...
Article continues here at: http://www.opendemocracy.net/ourkingdom/rupert_read/bank_of_britain
The recent banking crisis has surely shown that banks that are ‘light-touch’ regulated will invariably end up taking ever-greater risks, in pursuit of ever-greater profits. Such endemic risk is not basis for a secure real economy. Thus I have argued previously that there is a case for the banking sector to be genuinely nationalised (i.e. not run at arms-length), on a long-term basis...
Article continues here at: http://www.opendemocracy.net/ourkingdom/rupert_read/bank_of_britain
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