things I read yesterday … 06/04/2008
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FT.com / Companies / Financial services – Higher capital requirement could reshape banking model
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Whether we are talking of investment banking or commercial banking, returns will undoubtedly be lower in future. The only question is how much lower. There is a possibility, if the politicians are in the mood for such a move, that the banking system might even revert to the role of a utility, which is the way things were before the great deregulatory tide began in the 1970s. Not a cheerful prospect for risk-hungry bankers.
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That is the way many politicians would like to see all businesses – that is one reason we have so many regulations. We are lucky there are many politicians who really believe in a free market. It looks as though banking, oil and medical care will be the next utility.
Wendell Brock
June 4, 2008 at 23:48