Policymakers Keep Solving the Wrong Banking Problem
When a bank fails, the first response by policymakers and the public is to blame risk-loving speculators, greedy investors, or regulators asleep at the wheel. But quenching our thirst for moral adjudication is a poor basis for policy, because the truth is both simpler and more troubling.
https://prosyn.org/rsWRB7f
LONDON – Banks can fail, and often do. Yet whenever this happens, we act surprised. Worse, we look for villains and guilty parties, even when there are none. Risk-loving speculators, greedy investors, regulators asleep at the wheel: someone must be the bad guy. But quenching our thirst for moral adjudication is a poor basis for policy.