Regulation Can’t Prevent the Next Financial Crisis: Tyler Cowen

For all of you following the banking crises in the US and Europe, and asking why this is all happening again, I have bad news: Regardless of what laws are passed, or which regulations are issued, banking crises will recur — and not infrequently.

It makes sense to try to limit and prevent these crises, and the systemic reforms the US and EU mandated more than a decade ago were appropriate. But there’s only so much that can be done. Part of the reason stems from nature of regulation itself. And part of it is that more restrictions imposed ...