The fact that we were not able to ban mortgage securitization after the crisis is appalling. IMO this is the root of the problems. Make banks hold their loans on their balance sheets!
I also think the point about banks having capital buffers is laughable and not logical. It's like claiming we've solved chronic migraines because we have a stash of Tylenol. The cause has not been eliminated. And let's say there's a crisis and that bank capital is used to cover the losses. Now what? You now have banks which according to our own definition are under-capitalized. They used all their capital for yet another crisis. So now your banking system is weak again. Who is going to give money for these banks to capitalize again if they keep having crisis after crisis? Ah that's right, the taxpayer!
A nation's banking system reflects its cultural values. This is quite true about the USA.
I also think the point about banks having capital buffers is laughable and not logical. It's like claiming we've solved chronic migraines because we have a stash of Tylenol. The cause has not been eliminated. And let's say there's a crisis and that bank capital is used to cover the losses. Now what? You now have banks which according to our own definition are under-capitalized. They used all their capital for yet another crisis. So now your banking system is weak again. Who is going to give money for these banks to capitalize again if they keep having crisis after crisis? Ah that's right, the taxpayer!
A nation's banking system reflects its cultural values. This is quite true about the USA.