The paper discusses the systemic run nature of the financial crisis and proposes a regulatory response focused on eliminating run-prone securities. It critiques current regulations that guarantee run-prone bank liabilities and suggests a simpler, rule-based liability regulation. The author argues for banks to be 100% equity-funded and for the use of Pigouvian taxes to control debt issuance. The paper also explores the role of modern technology in overcoming traditional banking objections and critiques the current regulatory structure as overly complex and ineffective.
documents/EFTA00611654.pdf
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