“WE JUST NEED BETTER REGULATION”
The higher legislation view assumes that regulators have control of exactly what banking institutions do. That is a view that is extremely optimistic for several reasons:
1) The banking sector has much more funds and resources at its disposal than any body that is public to modify it. Consequently, banking institutions will be in a position to mobilise significantly more resources for bypassing particular policy reforms, beneath the guise of economic innovation, than regulators might have so that you can avoid them from performing this.
2) If regulatory policies are significantly effective, as in 1950s and 1960s, their part could be downplayed by lobbyists and eventually eliminated in the grounds that such limitations had been never ever needed to start out with. Continue reading