"Taking a long term historical view, Krugman argues that there is a negative correlation between the business model of banking and economic stability. Whenever banking got exciting and interesting, attracted intellectual talent and bankers were paid well, it got way out of hand and jeopardized the stability of the real sector. Conversely, periods when banking was dull and boring were also periods of economic progress.
To support his thesis, Krugman divides American banking over the past century into three phases. The first phase is the period before 1930, before the Great Depression, when banking was an exciting and expanding industry. Bankers were paid better than in other sectors and therefore banking attracted talent, nurtured ingenuity and promoted innovation. The second phase was the period following the Great Depression when banking was tightly regulated, far less adventurous and decidedly less lucrative - in other words banking became boring. Curiously, this period of boring banking coincided with a period of spectacular progress. The third phase, beginning in the 1980s, saw the loosening of regulation yielding space for innovation and expansion. Banking became, once again, exciting and high paying. Much of the seeming success during this period, according to Krugman, was an illusion; and the business model of banking of this period had actually threatened the stability of the real sector. Krugmans surmise accordingly is that the bank street should be kept dull in order to keep the main street safe."
"Taking a long term historical view, Krugman argues that there is a negative correlation between the 'business model' of banking and economic stability. Whenever banking got exciting and interesting, attracted intellectual talent and bankers were paid well, it got way out of hand and jeopardized the stability of the real sector. Conversely, periods when banking was dull and boring were also periods of economic progress.
To support his thesis, Krugman divides American banking over the past century into three phases. The first phase is the period before 1930, before the Great Depression, when banking was an exciting and expanding industry. Bankers were paid better than in other sectors and therefore banking attracted talent, nurtured ingenuity and promoted innovation. The second phase was the period following the Great Depression when banking was tightly regulated, far less adventurous and decidedly less lucrative - in other words banking became boring. Curiously, this period of boring banking coincided with a period of spectacular progress. The third phase, beginning in the 1980s, saw the loosening of regulation yielding space for innovation and expansion. Banking became, once again, exciting and high paying. Much of the seeming success during this period, according to Krugman, was an illusion; and the business model of banking of this period had actually threatened the stability of the real sector. Krugman's surmise accordingly is that the bank street should be kept dull in order to keep the main street safe."
This is exactly why i come here for .. query resolution and some different article sharing for knowledge enhancement ... thank u so much for this post of urs ... cant press the thank button 100 times or else i wud have ... rather than talkin abt corruption : where all we can do is talk about it , and sehwags 219 runs on west indies, this post of urs is really much much more preferable... thanks again for this and do keep posting such unique stuff .. ATB to u for RBI
"Taking a long term historical view, Krugman argues that there is a negative correlation between the business model of banking and economic stability. Whenever banking got exciting and interesting, attracted intellectual talent and bankers were paid well, it got way out of hand and jeopardized the stability of the real sector. Conversely, periods when banking was dull and boring were also periods of economic progress.
To support his thesis, Krugman divides American banking over the past century into three phases. The first phase is the period before 1930, before the Great Depression, when banking was an exciting and expanding industry. Bankers were paid better than in other sectors and therefore banking attracted talent, nurtured ingenuity and promoted innovation. The second phase was the period following the Great Depression when banking was tightly regulated, far less adventurous and decidedly less lucrative - in other words banking became boring. Curiously, this period of boring banking coincided with a period of spectacular progress. The third phase, beginning in the 1980s, saw the loosening of regulation yielding space for innovation and expansion. Banking became, once again, exciting and high paying. Much of the seeming success during this period, according to Krugman, was an illusion; and the business model of banking of this period had actually threatened the stability of the real sector. Krugmans surmise accordingly is that the bank street should be kept dull in order to keep the main street safe."
Interesting stuff so according to Krugman banking industry should be kept dull in order to protect real sectors will search on it.
Interesting stuff so according to Krugman banking industry should be kept dull in order to protect real sectors will search on it.
This reference was cited by D. Subbarao in his speech at CAFRAL-BIS International Conference on 15 Nov 2011. He is against the hypothesis of "Boring Banking" by Krugman. Here is the link of that speech. Enjoy All The Best
finally got my admit card venue yashawantarao chavan law college parvathi pune now i get to know why it was so late,they dispatched it on 3 dec 2011 from rbi office.
finally got my admit card venue yashawantarao chavan law college parvathi pune now i get to know why it was so late,they dispatched it on 3 dec 2011 from rbi office.
I am new to this and have no Idea about this RBI exam. Can please pm me what exactly is this RBI exam. If possible also PM me the url where i can get more info about this.