Why the Banking Crises Persist: The Consequences of Gambling with Credit

• Regulators and politicians around the world are trying to allay fears of a new banking crisis. But the bankruptcy of Silicon Valley Bank and the emergency merger of UBS and Credit Suisse were not the end.
• Even after the experiences of 2008, it was not possible to regulate the banks in such a way that risks did not repeatedly emanate from the sector.
• Ideas for effective reforms have been around for a long time. The banks now need not less but more regulation.

Sometimes there is something fateful about chance. On Monday of all days, the day after the dramatic rescue of Credit Suisse, Federal Finance Minister Christian Lindner (FDP) had an appointment with top managers from German financial institutions. The so-called “CEO roundtable” had been planned for months. But now the ministry was concerned that the meeting could be interpreted as a hastily convened crisis round. So what to do? Cancellations could possibly cause even more excitement. It was decided against.