Book contents
- Frontmatter
- Contents
- List of Figures, Tables, and Appendices
- Preface
- Rethinking Bank Regulation
- 1 Introduction
- 2 Contrasting Approaches to Bank Regulation
- 3 How Are Banks Regulated and Supervised Around the World?
- 4 What Works Best?
- 5 Choosing Bank Regulations
- 6 Rethinking Bank Regulation
- Appendices
- References
- Index
1 - Introduction
Published online by Cambridge University Press: 06 July 2010
- Frontmatter
- Contents
- List of Figures, Tables, and Appendices
- Preface
- Rethinking Bank Regulation
- 1 Introduction
- 2 Contrasting Approaches to Bank Regulation
- 3 How Are Banks Regulated and Supervised Around the World?
- 4 What Works Best?
- 5 Choosing Bank Regulations
- 6 Rethinking Bank Regulation
- Appendices
- References
- Index
Summary
But what is government itself, but the greatest of all reflections on human nature. If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.
James Madison, Federalist Papers, Number 51MOTIVATION
When budding entrepreneurs in Brazil, Egypt, Zambia, or Indonesia are turned down for loans or do not even bother to apply because banks instead funnel credit to the rich or politically powerful, this stymies innovation and thwarts economic growth. When households in Georgia, Nigeria, Russia, or Venezuela avoid placing their savings in financial institutions and instead buy foreign currency, physical commodities, or durable goods, this reflects queasiness about domestic banks and advertises the lack of efficient mechanisms for getting savings to productive firms. When bank managers in too many countries simply take deposits with one hand and pass them along to friends and related businesses with the other hand, this discourages business initiative and prevents the poor and unconnected with good ideas from realizing their dreams and improving their economic condition. When bad policies ignite or exacerbate banking crises in Argentina, Indonesia, or Mexico, this yields widespread bankruptcies, rising unemployment, and even soaring street violence.
- Type
- Chapter
- Information
- Rethinking Bank RegulationTill Angels Govern, pp. 1 - 17Publisher: Cambridge University PressPrint publication year: 2005