Duncan Weldon is the author of the ''forthcoming'' Searching Finance book Plan B for The Economy.
Last week I wrote about the case for a public inquiry into the banking sector (something the TUC has been calling for for three years now). The ideal model would be the US Pecora Commission of the 1930s which led to a system of financial regulation which, as Paul Krugman has argued, resulted in 50 years without a major US financial crisis.
It’s worth noting that a public inquiry isn’t a substitute for criminal prosecutions in the short to medium term, as in the case of Leveson criminal investigations can precede alongside a wide ranging inquiry.
Inspired by a weekend of rereading Sorkin’s ‘Too Big to Fail’, I’ve been thinking about the issue of Too Big to Fail (TBTF) banks – an area that any inquiry would have to look into and that got a load of attention around 2009/2010 but now seems to have faded from the world of day to day mainstream public policy debate.
One way to address the TBTF question would be to build on the Government’s existing Bank Levy by making it progressive.
As I see it, there are three primary challenges facing policy makers with regards to the banking sector.
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