In a world where capital is free to flow across international boundaries, the crisis in the US inevitably spreads to Europe and beyond
The most notable innovations of the past two decades have been financial. Like technological innovation, financial innovation is on a perpetual search for greater efficiency – in this case, reducing the cost of transferring funds from savers to investors.
Sadly, the financial revolution has been mostly profit-seeking rather than welfare-enhancing – based on eliminating, or at least reducing, two key elements of banking costs closely associated with prudential arrangements.
