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Economist's View: Using Anti-Trust Law to Break Up Banks that are Too Big to Fail - Mark Thoma
So more and more I'm starting to thing there may be a single explanation after all, that the regulators of these markets were captured by powerful forces that wanted the game to continue.

The power of regulators, and the will to enforce the regulations, must match - in fact exceed - the will and power of those being regulated to resist having constraints placed on their behavior.

I've talked about why ideology may have eroded the will of regulators, but their will is partly a function of their power. So long as we allow huge, clearly over-sized financial institutions to exist, this problem will potentially be present.

by Bernard (bernard) on Thu Apr 23rd, 2009 at 08:20:34 AM EST
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