Simon Johnson: evaluation

Transcript context

…But who counts as a bank? Money market funds don’t count as a bank in the same way. Crypto exchanges don’t count as clearinghouses in the same way. Financial regulation — should we extend it to more entities? I think Gary Gensler — when it comes to crypto exchanges, I think he’s got the right view, which is, if it walks like an exchange and talks like an exchange, it’s an exchange. Doesn’t matter what you call it. I think there’s a pretty clear definition also of what’s a security, which Gary is following up on. I think the bank-nonbank distinction is a really interesting one, Tyler, because of course, it all goes back to allowing money market funds to appear in the 1970s, which, in itself, was a reaction to high inflation and controls and interest rates. Once that genie has been let out of the bottle, it’s very hard to put it back in. I would not run around handing out a lot more banking licenses to things that are not banks, but I’d also be very careful and cautious of anything that provides bank-like services without a banking license, and that’s exactly what stablecoins are. The American separation of banking and commerce — does it still make sense? Why don’t we just abolish it? Plenty of countries don’t have it. Maybe their banks have been more stable than ours. Why have that form of the Glass-Steagall Act?…

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