If the banks had been as weak in 2020 as they were in 2008, core loss-absorbing capital across the entire system would have been slashed to a low of 1.5 percent of assets, less than a sixth of what is considered safe. Several of America’s biggest banks would have failed, requiring gigantic and politically toxic bailouts.10 Mercifully, thanks to tough new regulations and the banks’ own efforts at self-preservation, their balance sheets on both sides of the Atlantic were far stronger in 2020 than in 2008. To ensure that they stayed that way, bank regulators around the world in March 2020 barred
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