The financialization of the economy has brought a number of interrelated problems: financial crises that have led to severe economic downturns with high unemployment, declining economic opportunities, stagnant real wages, and reduced economic growth and thus growing income and wealth inequality. It is time to make a bold change by putting our financial house in order and on a better path. Higher capital requirements for banks, better regulations, supervision and enforcement, and the like are invariably helpful, but at best they will only delay the inevitable, another devastating financial crisis. Me prevalence of debt financing is at the heart of the problem. We need more fundamental reform of our financial system that reduces the supremacy of debt, encourages risk-sharing finance, and increases the fraction of reserves in fractional reserve banking.
CITATION STYLE
Askari, H., & Mirakhor, A. (2015). Conclusions and Our Financial Future. In The Next Financial Crisis and How to Save Capitalism (pp. 63–72). Palgrave Macmillan US. https://doi.org/10.1057/9781137544377_5
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