The upside of regulatory paralysis

By Felix Salmon
September 27, 2009
Joe Nocera explains one downside to having a single powerful regulator:

" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

Joe Nocera explains one downside to having a single powerful regulator:

Our problems would have been much, much worse if we had implemented Basel II. I guess this is one of those times when the paralysis created by all our overlapping bank regulators saved us.

This is true: power can always be used for good or for ill, to regulate or to deregulate, to give the banks more of what they want, or less. But that doesn’t mean that paralysis is a good thing. It just means that governments have to be super-careful not to let regulators be captured by the banking industry. Which, in places like New York and London, is much easier said than done.

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see