- We now have some financial institutions (and perhaps nonfinancial firms also) that have such strong and deep political connections, they will not be allowed to go bankrupt. This is a reality we must face.
- Assuming that we can address such a deep political problem with a tweak of our regulatory arrangements is a dangerous illusion.
- And it is less than convincing to assert that central bank “independence” offers either a model for regulators or even something that works well at present on its own terms.
By Simon Johnson