We must consider a separation of commercial banking from investment banking – ref. the 1933 American Glass-Steagall Act, dropped in the 1990s.
Commercial banking crises can pose systems risks. Core banks should not be brought down by risky investment banking activities.
Investment banks should be able to create products, make innovative deals in the marketplace, follow their investing customers.
Thus the society´s role in bank supervision and regulation should be to see to it that the core commercial banking system is well run and well capitalised. Enough capital is of prime importance.
All countries should try to achieve this goal. International cooperation then should follow – if we can manage that.