The trouble with articles like this is that they focus entirely on the problems created by 'relaxation' of regulation, but the benefits are not discussed. What we need to know is the net outcome (if it's knowable... But it's definitely worth discussing).
The benefits would be worth discussing, if only things weren't so far gone. Just in the last 15 years we've had two bubbles, rampant commodity speculation, tax-payer bailouts, more reckless investing by too-big-to-fail banks (Chase), and then there's LIBOR. All of this has had global consequences.
It's not a matter of discussing the merits of regulation anymore, it's a matter of dealing with the notion that these institutions just don't care. They've successfully infiltrated our government, and that's pretty much where we're at. We're going to sit here and discuss what?
We have the net outcome in front of us? Did you mean to say something other than wealth concentration to financiers, the meltdown of the world economy, the euro crisis...
Sorry, are you saying what the net benefit would be once you remove the calamities it has caused?
The major problem facing the world economy is excessive sovereign debt, and you cant blame the banks for that. Nor for the many other structural problems in the economy, or for shortage of natural resources, or AIDS, or wars, etc.
What people do is focus on one visible failing of the financial system, then assume everything would be rosy if not for that problem, ergo the banks are a drag on society. And then just devolve into a generic rant about the public being screwed by The Man.
The net outcome is whatever benefits the current banking system (or whatever aspect of it you're discussing) has brought minus whatever problems it caused.
> The major problem facing the world economy is excessive sovereign debt, and you cant blame the banks for that.
In a country like Greece this may be true, but in Spain - for instance - the country's sovereign debt before the financial crisis was low: it's the possibility of Spain having to bail out its over-indebted banks that is driving government bond yields higher there.
In the UK, the government was forced to nationalise the imprudent RBS and as such increase its own debt burden.
And in the US, the government has been motivated to issue more and more debt partly to help re-capitalise insolvent banks...
The debt/GDP ratios of nearly every sovereign country exploded when the financial crisis happened, as countries spent to keep the economy moving along. You can't cordon off the sovereign debt issue and call it a problem by itself, it's inextricably tied to the operation of the financial sector.
