The Price of Crisis Prevention
In the long term, the world economy can easily afford the costs of higher capital requirements for banks in order to insure against ruinous financial crises. The problem is that the short-term transition costs of tighter regulation could undermine the pace of economic recovery.
BRUSSELS – Two years have passed since the financial crises erupted, and we have only started to realize how costly it is likely to be. Andrew Haldane of the Bank of England estimates that the present value of the corresponding losses in future output could well reach 100% of world GDP.
BRUSSELS – Two years have passed since the financial crises erupted, and we have only started to realize how costly it is likely to be. Andrew Haldane of the Bank of England estimates that the present value of the corresponding losses in future output could well reach 100% of world GDP.