The financial crisis that erupted in 2007 was tackled decisively and in a coordinated manner by governments and central banks, with policies based on bank bailouts, public guarantees on the liabilities of intermediaries and exceptional injections of low-cost funds. In the meantime, they prepared the financial regulatory reforms necessary to make the system not only more robust, but also capable of absorbing future, inevitable crises without having to burden state coffers and therefore the taxpayer. This two-stage strategy failed because the second wave of the crisis, that of sovereign debt, effectively blocked a reform process that had been largely hampered by the banks, worried only of the immediate costs that would have resulted.
Onado's article (download , promising) traces the events of recent years and in particular the crisis of the euro countries, which today represents the most acute problem. The thesis is that the measures decided from time to time by Europe have systematically proved themselves too weak too late above all because the interests of the banks have been excessively protected (and in particular those of creditor countries).
The conclusion is that the current problems, whatever the future development may be, prove once more that banking regulation requires profound transformations and that drastic measures are still fiercely opposed by the banks (for example, the separation of the banking business retail, the one at the service of the economy, from the riskier financial one) must be taken seriously.
Download here the article by Marco Onado in pdf.
Attachments: Onado_Il_banchiere_di_ferro_di_today.pdf
