The type of solution on offer depends on what we are trying to solve.
The bare minimum actions to carry on with business as usual is correct the flaws in the present system demands re-regulation of the finance industry.
However, in the event of a major crash/deep recession or global economic depression demands a more radical overhaul of the way n which money is created.
Re-regulation of the financial system root and branch.
Here is a list of possible reforms of the banking system:
1. We will regulate all financial instruments firmly and permit only those that are transparent, that offer limited risk of financial destabilisation and are clearly beneficial.
2. Regulators should conduct “stress tests” on their models, and regulate according to what they discover. Regulations must focus on systemic financial functions, not on specific institutions as at present.
3. We will bring in specific regulations covering short selling.
4. We will ensure there is stricter regulation of the banks, limiting them. principally to the on-lending of customer deposits.
5. We will split retail banking from merchant banking and securities trading.
6. We will enforce appropriate fractional reserve ratios.
7. Financial institutions will be required to raise their reserves in good times, in order to cushion the bad times as proposed by Goodheart and Persaud.
8. We will require transparency in all financial trading, including that
undertaken by private funds.
9. We will clamp down on tax havens. We will break up large conglomerates, to make banks small enough to fail without wrecking the while system..
10. We will impose a Tobin tax on large-scale financial trades, the profits hypothecated to aid for less developed countries.
11. Bonuses paid to corporate CEOs on leaving their posts will be prohibited if the CEO is deemed to have failed.
2 Take away from private corporations their monopoly of money creation.
3 Build a Green New Deal to power us out of this recession.
The solutions necessary in a severe recession deserve solutionRadical a page to themselves.
