Protecting banks from market discipline sells well politically (as Zingales and Rajan argue): telling depositors they are protected is popular even though it is a flim-flam, which is why introducing even a small dose of market discipline is easily smashed politically and why neither politicians nor banks want it.

causalpending

Speaker

Charles Calomiris

Evidence Quote

the idea of even introducing a little smidgen of market discipline which the banks don't want is so easy to smash politically

Source

Charles Calomiris on the Financial Crisis 10/26/2009EconTalk
Created: 6/15/2026, 9:20:15 AM

My Notes

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