The behavior of financial markets in recent years has meant that liberal ideas now get a shock. The most stupid now would not admit obvious errors. Instead, the regulatory implications to be examined objectively.
first The regulation of banks failed. It does not need less regulation and not more regulation, but purposeful. From the outside crowd on three ideas: (1) The capital requirements may not be risk-weighted. Risks will be managed through interest rates! That was the critical weakness of Basel II and must be corrected be. (2) Equipment must not be mark to market assets, but in accordance with prudence, because it is usually estimated in flights of the situation and optimism in the crash will be too pessimistic. (3) Structured products can not continue to be sold if the seller retains a portion of it for themselves.
second The implications for the financial sector are still not clear to estimate. The business model of universal banking seems to triumph, in contrast to the pure and unregulated investment banks. The government guarantee may send wrong signals, in the case of a systemic crisis but it is always implied.
third Politics is unprepared. Prime example is the Swiss Federal Council. I believe (unlike many others) that the Federal Council does a good job generally. In this crisis, but he failed miserably. The machinations of the banks would be strongly condemns, it would have to be made to the limitations of a purely speculative reasons of capitalism. In the interest of the market economy is more important than ever to reflect on the benefits of creative entrepreneurship. Instead, we hear nothing pure heat, and some journalists, some with undifferentiated bad news, the crisis is joyful, rather than as now pointed to the open-border investment opportunities.
4th The crisis has revealed the limitations of market mechanisms, open. Not that there is in this case, someone else (a state bank) could have done better, only the market can nearly always as if by magic for optimal resource allocation. The market, which has failed to grasp this far. Obviously it was not just bank managers who have miscalculated, but also investors, borrowers and sometimes even central bankers (who reacted too late or, as in the U.S., the whole still fueled). It is the problem with the invisible hand: Sometimes it is so invisible because they were not there. Faith makes blessed. It is better to understand the circumstances and to draw pragmatic conclusions! Liberalism is not just less government, but it is the perception of fundamental tasks by the state, ensuring the personal and economic freedom. Provision of security, from basic education and goods which the market can not or insufficiently provides: infrastructure for water, transport, electricity, communication. And last but not least, guarantee a livelihood for the vulnerable in our society, especially in the form of food and ensuring basic health care. Otherwise, a liberal state to be cautious.
5th to nationalize the banks would be a double-edged blade: in the next crisis wore then the state guarantees the sole responsibility ...
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