Thursday, March 25, 2010

Kroszner: The Financial Crisis and Reform: A Close-up View

"...a revival of the Glass-Steagall Act that separated commercial and investment banking, or the so-called “Volcker Rule” barring investment banks from proprietary trading and running hedge or private equity funds, would have unintended consequences. “This pressure to break things up is only going to increase these interconnections and potentially make the system more fragile,” he said.

The priority should be to make market infrastructure more robust, particularly by improving the bankruptcy resolution regimes..."

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