Deconstructing the Magic Money Tree - Episode 8

Bank Regulation, more bottom-up or more top-down?

Mike and David debate the need for regulation of banks and for rules separating the high street commercial banks from the speculative activity (ie gambling) of the investment banking sector. More broadly, they consider what is driving the risky behaviour of the banking sector. Is it lack of regulation or is it toxic regulations that amount to special privileges?

Once again the issues surrounding fractional reserve banking feature in this debate. But the discussion goes further into the murky world of investment banking, with securitised assets, derivatives and other exotic financial products. A world of fraud, gambling and financial fog.

How much much separation is needed, or even is possible. Can the real economy be insulated from the speculators? These questions and more are asked as the conversation hones in on more specific matters for the ongoing deconstruction of the magic money tree.