The continuing financial fragility of banks

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Banks remain fragile, which could be reduced if they held more equity and less debt. Bankers, however, fear this could affect their compensation packages. Commercial banks are likely to win the political debate, except if there is another financial crisis causing the need for further reform to become acutely pressing. Charles Goodhart writes that we need to consider what else might be possible if the preferred solution is politically unfeasible.

Published on LSE Business Review