Lehman Brothers collapse: Fear of repeat has made global banking too boring

Regulation has deprived emerging markets of desperately needed infrastructure finance

As bad as the 2008 crisis was, the cure could be worse. After Lehman Brothers fell and the U.S. government stepped in to rescue finance from its worst instincts, many demanded that banking become “boring” again. Stolid lending, it was argued, was what banking should be all about.

It’s time to recognize that this was a mistake. Finance is indeed more boring than it was earlier. But, that’s hurt the world over the long term much more than it’s helped.

Consider the Basel-III regulations which, following the crisis, have become the basis for much macro-prudential regulation of banks worldwide. Among the many