The Economist January 24th - January 30th 2009
The Economist (January 24th - January 30th 2009) with Special report on the future of finance
182 Pages | English | PDF 3 MB | Audio 165 MB | MP3
Inside the banks
Blank cheques, bankruptcy, nationalisation: the options are dire, but governments must choose between them:
This crisis is so huge that seeing beyond it is hard. Yet even now policymakers need to plan for the future of finance—partly to convince voters that today’s rescue is preparing for a better system; partly because finance’s shortcomings and the taxpayers’ guarantees make an overhaul of regulation necessary; and partly because sensible reforms are hard to devise.
Having seen finance wreak havoc, the temptation will be to bind it in a regulatory straitjacket. Some tighter regulation is in order, especially if it is aimed at making the system more transparent. But this crisis was born of economic excess as well as financial folly; given the torrent of capital flowing into America, Britain, Spain and so on, almost any financial system would have gone wrong. Financial re-regulation is not the only reform—it may not even be the most important. Yet finance makes the rest of the economy work. Mr Obama’s prize for remaking finance will be measured in prosperity and jobs. The work should begin now.