tag:blogger.com,1999:blog-6048425.post8121969230626143951..comments2023-11-02T15:32:15.417+00:00Comments on Bluematter.: An alternative approach to bank regulationUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6048425.post-6566305663800463662008-05-06T22:05:00.000+00:002008-05-06T22:05:00.000+00:00It's not a bad idea but I don't quite see how it w...It's not a bad idea but I don't quite see how it would disincentivise some of the sillier risk-taking we've seen over the last few years.<BR/><BR/>Bailing out banks is something that governments do reluctantly, but systematically, in the interests of greater stability. The small but substantial risk of having to save a bank is an implicit liability of on the balance sheet of pretty much every government in the western world. This may not be immediately obvious to taxpayers but it's hardly obscure either.<BR/><BR/>A well-functioning banking system displays many of the characteristics of a public good in that we all benefit from the existence of healthy banking system no matter how heavy or light our use of it is. So I don't quite see why banks should be charged explicitly for the security that only something as large and coordinated as the government can provide anyway.Shanehttps://www.blogger.com/profile/08036056918525875236noreply@blogger.comtag:blogger.com,1999:blog-6048425.post-56903470257194252962008-05-06T12:43:00.000+00:002008-05-06T12:43:00.000+00:00In theory I agree with the idea- but it suffers fr...In theory I agree with the idea- but it suffers from a problem typical of many economic thinkers in that it does not consider the operational issues.Anonymousnoreply@blogger.com