There seems to be a pattern doesn't there: regulation is introduced in response to a financial crisis; the economy evolves and the regulatory framework is seen as outmoded and inefficient and the "regulatory dialectic" plays itself out; financial liberalization occurs and financial entrepreneurs push their new freedom to its limits, resulting in a crash....and so it goes on. Cycles are endogenous to capitalism.
But we have at least learned something from the Great Depression:we seem better able to insulate the real economy from the pathologies of the financial sector, through automatic stabilizers and discretionary policy.
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