Wall Street – and much of the U.S. political/media elite – are resisting the hard lessons and the tough steps that could protect the global economy from another financial meltdown like the one that pushed the world to the brink of another Great Depression.
Jomo Kwame Sundaram, better known as Jomo KS, a senior United Nations economist, said the crisis could be traced back to the repeal of U.S. banking regulations that had been in place since the Great Depression of the 1930s.
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The regulatory repeal, which broke down the barriers between commercial and investment banks, contributed to an overheated financial sector that “accounted for 15 percent of the economy, but had 40 percent of the profits,” said Jomo KS. In his view, the aftermath of the crisis requires a new set of regulations that can constrain excessive risk.
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