“And the combination of concentration, interbank lending, financial innovation and technological acceleration makes it a system especially prone to crash. Once again, however, the difference between the natural world and the financial world is the role of regulation. Regulation is supposed to reduce the number and size of financial forest fires. And yet, as we have seen, it can quite easily have the opposite effect. This is because the political process is itself somewhat complex. Regulatory bodies can be captured by those whom they are supposed to be regulating, not least by the prospect of well-paid jobs should the gamekeeper turn poacher. They can also be captured in other ways – for example, by their reliance on the entities they regulate for the very data they need to do their work.”

Excerpt From: Ferguson, Niall. “The Great Degeneration.” Penguin Group, USA, 2013-05-15. iBooks.

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