Towards a Sustainable Financial System
This final chapter combines the regulatory building blocks reviewed in the preceding chapter according to a principle of compartmentation of the financial system. The author maintains that compartmentation plays a crucial role in all living and artificial systems liable to episodes of instability and crisis, as is confirmed by a series of examples drawn from different fields. The new regulatory design should guarantee not only the stability of the financial system but also its respect of the principles of substantive democracy. The author argues that the policies pursued by regulators in recent decades had a crucial impact on the evolution of the financial system, and that—in the absence of an explicit and specific mandate of the legislature—this influence cannot be convincingly reconciled with the principles of democracy. The author advocates the establishment of a new guardian institution that represents the interests of all citizens and assures the compliance of the financial sector with the principles of democracy.
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