Good summary of Tuesday's discussion points

Simon Johnson, an MIT professor, has written prolifically  about the crisis and its aftermath He had a blog piece today that highlights many of the points discussed last night:  He points out that almost no one says that the banks are the "right" size.  But bank capture of regulators and politicians has made it difficult to resize them and do away with some of the implicit and explicit subsidies.  It is a short clearly written post.  The link is below.

Operating
big financial firms with small amounts of equity capital and a lot of
debt may be in the interest of their managers, but it is definitely not
in the interest of the rest of society. Moreover, providing large
implicit subsidies to firms that are too big to fail should not be an
attractive policy, because it encourages such firms to take on excessive
risk (and to become even bigger).

CommentsView/Create comment on this paragraphAnd
yet debate about these issues has remained wide open. The question is
no longer so much one of beliefs. Now it is simply about money –
particularly campaign contributions, but also the revolving door between
Washington and Wall Street, as well as the vast pro-megabank interests
that pour millions of dollars into think tanks and other, more shadowy
organizations.

Read more at http://www.project-syndicate.org/commentary/simon-johnson-points-to-european-governments-as-the-main-obstacle-to-financial-re-regulation#ePB0qjS2CO8uq34D.99

Simon Johnson points to European governments as the main obstacle to financial re-regulation. - Project Syndicate