These are scary times for banking regulators around the world. Bank runs, bankruptcies, a crisis of confidence etc. These are not factors leading up to the Great Depression, but rather, ripped from today's headlines. Things that would probably keep even Alan Greenspan awake at night! Ben and Hank have definitely lost sleep this past month...
But there's one man who seems to be doing otherwise. Liu Mingkang, Chairman of the China Banking Regulatory Commission. In our conversation, Mr. Liu offered his observations on why we're witnessing the global banking system go to pieces.
It was ironic in a way -- someone who has faced intense pressure and criticism from outside quarters to shore up China's financial institutions now calmly explaining how the meltdown, in what was supposed to be the world's strongest financial systems, could never happen in China.
If one thing is clear in the confusing and chaotic events of the last few weeks, it is that the days of less regulation and unadulterated capitalism are over. In future, we will see more government oversight and intervention in the financial system. That's something Mr. Liu knows a thing or two about.
How much of a role should governments play in regulating financial institutions and systems?
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