Publication
14 Nov 2008
Bubbles and crashes have been part of financial markets for centuries. Allowing banks – which inevitably borrow short and lend long – to get deeply involved into financial markets is a recipe for disaster. The solution is to restrict banks to traditional, narrow banking with traditional oversight and guarantees while requiring financial firms involved in financial markets to more closely match the average maturities of their assets and liabilities.
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English (PDF, 3 pages, 51 KB) |
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Author | Paul De Grauwe |
Series | CEPS Commentaries |
Publisher | Centre for European Policy Studies (CEPS) |
Copyright | © 2008 Centre for European Policy Studies (CEPS) |