Martin Wolf on why banks fail and what to do about it
Behind the Money
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Banks Are Designed to Fail
Banks are intermediaries, and the assets they hold are by and large risky. People have to get in their minds that this is a very strange combination of activities for one institution. The argument is people really want to hold safe liquid assets because it gives them comfort. But we want there to be a very large supply of relatively cheap and flexible credit to our economy.
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