7894bdb0_brary_of_Economics_and_Liberty__ast_Highlights_HIDE_HIGHLIGHTS
[Time] 1:03:21
Quote from Arnold Kling, in a study for Mercatus Center: "The lesson is that financial regulation is not like a math problem, where once you solve it, the problem stays solved. Instead a regulatory regime elicits responses from firms in the private sector. Those financial institutions adapt to regulations; they seek to maximize returns within the regulatory constraints...." Agree? Where might we make some progress? Share sentiment that the regulators are running behind the innovation; regulation can't be static, which makes it very challenging. Tendency for complacency to set in as time elapses from your last crisis. Not really confident that we are going to come up with the regulatory framework that prevents a major financial crisis from happening again. Not in the stakes now in the United States, but elsewhere they are brewing. As the awareness fades and financial markets move to something else, which they will, it will all happen again.
Reinhart on Financial Crises | EconTalk | Library of Economics and Liberty