ABSTRACT. The design of a more stable global financial architecture is currently the most important topic on the international agenda. But compared to the dimensions of the financial crisis, the solutions that have been put forward seem rather modest. While there is no doubt that more transparency as well as better designed and stronger capital buffers will help to make the global financial system more stable, it is far from clear whether such a piecemeal approach will help to prevent major crises in the future. The almost unlimited government support of banks in the current situation raises the stakes even higher and has increased the incentive problems facing bank depositors and lenders. (pp. 113–118)

JEL: F01, F30, R53