Fixing one problem often creates another. The financial crisis has produced a wave of regulation to make the banking system safer. Banks are being required to hold more capital. They are being pushed out of riskier areas of activity. This week regulators in America and Britain gave more details of plans to impose losses on bank bondholders to spare taxpayers the cost of resolving failing lenders (see page 66). Such reforms are needed. Banks must be better cushioned against losses and it must be possible for them to fail.
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