Economics: More Bank Reforms Needed, Economists Say

Global financial reforms that have drawn howls from bankers aren't nearly enough to avert another disaster, said academic economists gathered here for the annual meeting of the American Economic Association.

Over the past few days ... economists here offered a litany of reasons why the reforms fall short. Among their concerns: The new capital requirements aren't tough or simple enough, there is too much uncertainty about how governments will deal with distress at the biggest lenders, and little has been done to prevent the kind of crisis that could occur if trouble broke out at many smaller institutions, such as hedge funds.

"I just don't think we're doing what we need to do," said Anat Admati, a finance professor at Stanford University. "We've allowed bankers to confuse us into keeping things pretty much the same."

For more, see More Bank Reforms Needed, Economists Say by Mark Whitehouse, January 9, 2011 at The Wall Street Journal.