Banking split essential to avoid new financial crisis, warns OECD adviser

[CHIMO]

The global economy will be plunged into a second and even more serious crisis unless banks are split into separate retail and speculative arms, a senior policymaker from the west's leading thinktank said today.

Adrian Blundell-Wignall, special adviser on financial markets to Angel Gurría, secretary general of the Organisation for Economic Co-operation and Development, said that without a basic reform of banks "the lesson from the crisis was that it was not big enough".

Blundell-Wignall, speaking in a personal capacity at the OECD's annual forum in Paris, said one of the big obstacles to better global governance was "institutional capture" of policymakers by the leading global financial institutions.

"I think the whole regulatory structure and incentives are wrong," he told a panel on the future of capitalism. "We need to separate capital market banking from standard commercial banking. That's the most basic lesson of the crisis."
http://www.guardian.co.uk/business/2010/may/27/banking-split-essential-oecd-adviser-says

[dmallind]

1. It would be a start

Not sure it's a panacea - I'd focus a lot more on naked hedging in derivatives - but it sure as heck couldn't hurt.

[villager]

2. Panel on the "future of capitalism?" Capitalism has a future, after cannibalizing

...all its workers, and the planet? :shrug: