Free Markets Told Us How Much Capital Banks Need
Almost everyone, except maybe certain bankers and those in their service, thinks that banks should have more capital. A thicker capital buffer, as Stanford professor Anat Admati wrote a few days ago, would make banks more resilient in the face of losses, reduce the risk of a financial panic like we had in 2008-2009, and lower the odds that taxpayers will be called upon to prop up lenders deemed too big to fail.
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