Expanding state

Expanding state
A trend toward increased government influence in economies and personal life is curbing growth, and freedom, in many Western countries. The outsized role of government results in misplaced incentives, overregulation – which restrains markets and competition – and irresponsible budgetary policies. It leads to planned economies and principalist, authoritarian, centralist and also socialist policies. As history shows, such governments inevitably fail in the end.

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Former head of the International Monetary Fund (IMF) Christine Lagarde became President of the ECB in the fall of 2020

GIS Dossier: The shifting grounds of EU banking rules and supervision

Bank regulators are forced to close their eyes again to vulnerabilities that made the 2008 banking industry meltdown possible. They need to ensure that banks continue supporting the real economy during the pandemic. For instance, capital requirements are being softened and regulatory relief given so banks can lend as much as possible to the private sector. When credit risk stops being an issue, however, financial instability can follow quickly.

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