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Clive Crook on global finance

Clive Crook has written another great survey for The Economist, this time on global finance. The highlights for me:

Global financial flows do indeed need close regulation, much more so that flows of goods and services. This is a bit of climb-down (though a sensible one) from The Economist's normal hard line on liberalisation.

The best way to overcome the moral hazard experienced by banks is to force them to issue subordinated debt (debt that returns a fixed interest but doesn't get repaid in the event of a collapse). Nice logic!