Today I have realised that the current crisis started in 2007, almost five years ago, and we are still in the middle of it, with not a clear path to recovery. In the case of Spain, and extending it to the European Union, the end of the crisis seems to be light years away from us. What started as a mere crisis coming from a bubble in Wall Street, which was supposed to be similar to the "dotcom bubble", for example, has become the most severe crisis in recent history (in the case of Spain, given our past full of defaults, it is convenient to add the adjective "current").
The first months of the crisis saw a miriad of initiatives to change the global financial system, in order to make it more manageable and sustainable. However, now, after some years and some billions of euros (or dollars or pounds) of taxpayer money, most financial institutions seem to be back to the mode "business as usual" and are expecting to go back to their quiet and greedy life as before the financial crisis. It is the role of the supervisors and regulators worldwide to stay firm in the reforms and not to give up to their pressure.
In this context, I have found a paper from the Federal Reserve of Dallas about the role of big banks (too-big-to-fail in financial jargon) in the economy: http://www.dallasfed.org/assets/documents/fed/annual/2011/ar11.pdf. The paper is written in a very uncommon way for a regulator, and it is certainly worth the reading. I would like also to show my appreciaton for Harvey Rosenblum, the author of this paper, for its brave and clear explanation of our financial systems. His analysis of the factors behind the excesses in the financial system (complacency, greed, complicity, exuberance and concentration) is outstanding and clear like water.
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