Conversations with Tyler Simon Johnson on Banking, Technology, and Prosperity
14 snips
May 17, 2023 
Simon Johnson, a British-American economist and MIT professor, dives into economic development and banking complexities. He discusses his co-authored book with Daron Acemoglu, arguing that prosperity requires intentional effort to steer technology's benefits away from elites. Topics include the risk of 'too big to fail' banks, the implications of AI on wages, and the historical misinterpretation of the Middle Ages. Johnson critiques UK trade dynamics and emphasizes the need for institutional reforms to help regions like northern England thrive.
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Bank Size and Systemic Risk
- Explore bank failures to determine at what size systemic effects occur.
- Letting banks go over $50 billion in assets may require more attention due to systemic risks.
Managing Bank Failures and Contagion
- Impose haircuts on uninsured deposits at failing banks to address moral hazard.
- Insure all other banks to prevent contagion, as suggested by Sheila Bair.
Insuring Deposits Above $250,000
- Insuring all deposits above $250,000 could incentivize excessive risk-taking.
- Money might move to less regulated money market funds, exacerbating the problem.
