Intervening moments.

Author:Graziano, Ovidio

In the hope that the worst of the financial crisis and the consequent recession are really behind us, the question we face now is to understand the role that central governments play in the financial sector.

Once described by former US president Ronald Reagan as "the problem", governments have played the role of rescuer (like it or not) of most western economies by bailing out banks and buying toxic assets. This will soon result in a surge of public debt, an increase in the amount of interest to pay, a probable decline in public services and, most unpopular of all, an increase in taxation.

Barack Obama recently declared his intention to take on Wall Street by announcing plans for stringent rules on the banking industry. Some...

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