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By David Wessel
With the one-year anniversary of the collapse of Lehman Brothers approaching, economists are listing lessons learned. Among them is Richard Berner of Morgan Stanley.
Here are his five lessons, drawn from a presentation at recent conference sponsored last month by the Central Bank of Argentina and elaborated on in a note to clients last week:
1. “A strong and well-regulated financial system should be the first line of defense against
financial shocks …. [T]he more free-market oriented we want our economies to be, the more we need official supervision and oversight of our financial institutions and markets. That’s because truly free-market economies involve a high risk of business failure, and corresponding high risks to the financial institutions and investors that lend to and invest in those businesses. A key lesson from this crisis is that competition among lenders breeds innovation, but also instability.”
Posted by Nicole Nelson
I believe Wessel's thoughts and views of the five rules to get the economy out of the slump is definitely effective with the government regulations or oversee of the economy.
ReplyDeletePosted by Lily Mei