[Marxism] Martin Wolf on the stress tests and regulatory capture

farmelantj at juno.com farmelantj at juno.com
Wed May 13 07:45:35 MDT 2009



It's not quite true to imply that concern with
regulatory capture has been exclusively a
concern of the left, since on the right,
the Chicago School and the Hayekians have
been concerned with it as well.  In fact
many of these people argue government
regulation is the main force driving
the development of monopolies, so that
deregulation is supposed to in their view
lead to the disappearance of monopolies.

Jim F.

---------- Original Message ----------
From: Marv Gandall <marvgandall at videotron.ca>


Wolf's concluding comments are another indication of how regulatory capture,
once mainly the province of the left, has become a major concern of
mainstream analysts and big institutional investors. The crisis has driven
home that lax regulation magnifies counterparty risk and the potential for
systemic crisis. For Wolf and others, the worrisome question is whether the
financial system is still amenable to state control, or whether the size and
power of the banks deemed too big to fail is now such that effective
regulation, even by would-be reformers, is no longer possible, threatening
"another and possibly still bigger financial crisis in the years ahead."



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