ERM frameworks [57]

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Bullet points include: Implicit compact between banks and governments. Banks provide framework allowing money to be a medium of exchange. Governments protect depositors against failure of banks and in return impose regulatory frameworks on banks, including minimum capital requirements. If depositor protection too costly then reduce activity base creating such exposures. Forced unbundling of banks that are ‘too big to fail’. Unbundle commercial banking from investment banking? Glass-Steagall? Proprietary versus agency trading. Or reduce deposit protection limits? Not palatable to governments/electorate

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