VoxEU has a new compilation of the latest European thinking on reforming finance. While a lot of it is in EconoEnglish, I think many will find some sympathy with the ideas and issues being addressed. For example, since in a crisis the importance of finance to the economy means that banks will be bailed out or at least debt will be worked out, there is a socialisation of losses but gains will be private in more normal times. In other words, there is a negative externality involved in banking, which is not fully reflected in its pricing, the pursuit of gain or risk taking, or in its distribution of profits.
These and more issues are discussed, so if you’re willing to wade through some of the jargon, the e-book is still a worthwhile read.
Technical Notes:
Beck, Thorsten ed., “The Future of Banking”, Centre for Economic Policy Research, October 2011
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