Financial Times FT.com

Financial sector: Narrow banking alone is not the answer

By Martin Wolf

Published: December 14 2009 23:24 | Last updated: December 14 2009 23:24

What entered the crisis was, we now know, an ill-managed, irresponsible, highly concentrated and undercapitalised financial sector, riddled with conflicts of interest and benefiting from implicit state guarantees. What is emerging is a slightly better- capitalised financial sector, but one even more concentrated and benefiting from explicit state guarantees.

This is not progress: it has to mean still more and bigger crises in the years ahead.

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