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Comment: Reform of Financial Institutions

Published online by Cambridge University Press:  19 October 2009

Extract

William Gibson has presented a useful analysis of the Administration's proposals for financial reform, and I have no difficulty concluding with him that they should be passed. But, I find myself in some disagreement with him on a number of matters of interpretation.

Type
Reform of Financial Institutions and Markets: A Progress Evaluation
Copyright
Copyright © School of Business Administration, University of Washington 1974

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References

1 See, for example, Meltzer, Allan H., “What the Commission Didn't Recommend,” Journal of Money, Credit and Banking (vol. 4, No. 4, November 1972), pp. 10051009CrossRefGoogle Scholar; and Robinson, Roland I., “The Hunt Commission Report: A Search for Politically Feasible Solutions to the Problems of Financial Structure,” The Journal of Finance (vol. 27, No. 4, September 1972), pp. 765777.CrossRefGoogle Scholar

2 For a seminal analysis of the problem, see Minsky, Hyman P., “Financial Instability Revisited: The Economics of DisasterReappraisal of the Federal Reserve Discount Mechanism (vol. 3, June 1972)Google Scholar. The difficulties faced by financial institutions and the difficulties faced by the monetary authority during a period of expansion and inflation are complex and inextricably related. I doubt that the former can be substantially remedied without reference to the latter. But the formulation and implementation of monetary policy is a subject that apparently was beyond the scope of the Administration's analysis of financial reform, as it was also beyond the scope of The Hunt Commission study.

3 Shull, Bernard, “New Competition and Predatory Practices in Commercial Banking,” Banking Law Journal (forthcoming).Google Scholar