Remember when a bank manager was the epitome of prudence? For the past six months, almost all the news from banking has been bad, even though this is an industry monitored by vast teams of regulators. By contrast, the unregulated hedge-fund industry has buried its dead with much less fanfare and many fewer unpleasant consequences. This suggests two main possibilities. Either the standard of bank regulation is very poor or there is something about being regulated that leads to trouble.
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