Simon Johnson on the Financial Crisis

Simon Johnson talks with host Russ Roberts about the origins of the financial crisis and how to prevent the next one. He argues that the financial sector has captured the regulatory process and that regulation has been steered more by the interests of the financial sector than to the benefit of the general public. Johnson argues for capping the size of banks in order to reduce the danger of systemic risk and the too-big-to-fail excuse for bailing out banks. Johnson also discusses the role of the Fed in subsidizing risk-taking and leverage in the financial sector.