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Making banks boring again

In the modern financial services industry, banks have become casinos attached to utilities. The aim of any regulatory overhaul should be a rigorous separation of the two, with protection only to be extended to retail customers

By John Kay   January 2009

A vibrant and professional financial services industry is essential to a prosperous economy. Only market economies can provide citizens with the standards of living that the people of western Europe and north America have come to expect. A market economy requires a financial sector to direct investment to the most productive uses and to monitor the performance of large businesses. This finances the operations of governments and, by borrowing short and lending long, enables borrowers and lenders to operate on different timescales. A well-functioning financial sector serves the individual financial needs of its citizens, allowing them to save and to…

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