The final lesson is that the big showdowns between democracy and big bankers are still to come – both in the United States and in continental Europe. On the surface, the banks remain powerful, yet their legitimacy continues to crumble....Banks and politics are deeply intertwined in all advanced economies. Diamond discovered that, ultimately, politicians trump bankers – at least in the UK.
But what really matters is legitimacy and informed public opinion. Do you really believe the increasingly dubious notion that megabanks, as currently constituted, are good for the rest of the private sector, and thus for economic growth and job creation? Or do you begin to consider more seriously the increasingly mainstream proposition that global megabanks and their leaders have simply become too powerful and dangerous?Read it at Project syndicate
Finance’s Crisis of Legitimacy
by Simon Johnson | Professor, MIT