"The core problem is this: regulators can only protect so much of the financial system. Yet in a wealthy, peaceful economy the financial system often grows more rapidly than does gdp, if only because the financial system is based on the intermediation of wealth, not income. Simple accumulation boosts the ratio of wealth to income over time, thereby creating regulatory dilemmas for finance. Neither “regulating more and more of it” nor “letting more and more of it continue in a less regulated manner” are entirely satisfactory solutions."
