“Instead of exhausting ourselves drawing up hopelessly complex codes of ‘macro-prudential’ or ‘counter-cyclical’ regulation, let us go back to Bagehot’s world, where individual prudence – rather than mere compliance  was the advisable course, precisely because the authorities were powerful and the crucial rules unwritten.
I began this chapter by contradicting the proponents of stricter regulation, only to end it by advocating the exemplary incarceration of bad bankers. I hope it is now clear why these positions are not contradictory but complementary. A complex financial world will be made less fragile only by simplicity of regulation and strength of enforcement.”
Excerpt From: Ferguson, Niall. “The Great Degeneration.” Penguin Group, USA, 2013-05-15. iBooks.
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