What is the rationale for regulating banks ?
نویسنده
چکیده
In recent decades there has been significant deregulation in many industries. A sector that remains heavily regulated is banking. Why is this? In this article we argue that current banking regulation is the result of a sequence of reactions to historical events. Given that it is not designed to solve any particular problem, it is not clear that it is very effective. In what follows, we identify two important market failures that can justify intervention. What is the rationale for regulating banks?
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