Simon Johnson: belief

Transcript context

…Universal banking, as we’ve had in Japan, Germany — I remember the 1980s, parts of the ’90s. People said how great it is. Were they wrong in overrating universal banking? Those nations have not done perfectly since then, right? Yes, exactly. The Japanese banks ran into big trouble end of the ’80s and the ’90s, and subsequently have been pretty rough, and the European banks are also regarded as an imperfect model. Deutsche Bank, for example, is often held out as being very problematic, although it’s backed by the German state, so they can get away with a lot of things. These Swiss banks that were struggling this week had universal bank features at some points in their history. I think banking is a difficult business and rife with problems for the rest of us, Tyler, however you organize it. On Should very small countries be allowed to have such large banks? If you look at Credit Suisse liabilities relative to Swiss GDP, I’m not sure what the number is now, but those two things are not so far apart, right?…

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