Drastic action

Authorities at the centre of the financial crisis are prescribing more regulation and more capital as appropriate measures to prevent a similar calamity in the future. But a study released this month by Japanese think-tank, the National Institute for Research Advancement, says bolder and better action is required. Tsuyoshi Oyama reports

More than two years have passed since the problem of subprime loans – at the time confined largely to a single country – metamorphosed into a fully fledged global financial crisis within a short period of time. Massive liquidity provision and an ultra-easy monetary policy introduced by the central banks of all the major economies, alongside government bailouts for many financial institutions, has