Global Banking: What Should Be Done?
By Elliott R. Morss:
Introduction
U.S. bank purchases, packaging and trading of mortgages and their derivatives in late-2008 resulted in the U.S. banking collapse and the global recession. European bank purchases and packaging of Greek and other sovereign debt is close to causing another global meltdown. That leads to the question posed by the title: what should we do about it. In the following article, I consider several viewpoints on what should be done.
The Bhid
é
and Lounsbury Suggestions
In a NYT op-ed piece, Prof. Amar Bhidé recommends:
- Governments should fully guarantee all bank deposits;
- Governments should impose much tighter restrictions on risk-taking by banks, and finally
- Banks should be forced to shed activities like derivatives trading that regulators cannot easily examine.
John Lounsbury, Managing Editor and Co-founder of Global Economic Intersection has suggested: “... the depository function of banks should be regulated as are public utilities. That public utility function is in factComplete Story »
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