Many things have been, or are in the process of being, changed as a result of the recent financial crisis. Some of these changes have already been discussed in earlier chapters, such as new rules for capital requirements and liquidity ratios, and ceilings on bonus payments in banking. While the higher demands on banks’ capital and liquidity ratios may be postponed until 2012 or even later, they will come, say the leaders of the G-20 countries, and this, after all, is the important factor in influencing banks’ decision-making and, in particular, risk-taking. It is mainly in the USA, after the Republicans’ control of the House of Representatives as a result of the mid-term election of 2010, that doubts remain about how harshly the decisions already taken will be implemented. Detailed decisions that have to be made concern such things as the role of proprietary trading, capital requirements, derivatives trading and clearing, and, not least, the power to break up firms that are “too big to fail.”

The financial crisis of the first decade of the twenty-first century would have been vastly more serious without the experiences from earlier crises, which led to changes in the financial system and in the supervision of the financial markets. Deposit insurance to prevent bank runs was introduced in the USA directly after the Great Depression, but in Europe only in the 1990s in most countries. Luckily, deposit guarantee schemes were in operation when today’s crisis struck, else we would have seen far more bank runs. They need to be improved in two ways. First, the level of protection must be made permanent, at least at the present levels, or, preferably, increased further. The European Union has proposed that the level be raised from €50,000 to €100,000 (or equivalent). It should be doubled to agree with US limits. The USA will keep its present limit at $250,000 rather than let it fall back to earlier levels in 2014, as originally planned. Generosity will certainly pay off; after all, it is the banking system itself, not the taxpayer, which foots the bill. Second, it is of the utmost importance that the fees reflect the actual riskiness of a particular bank, as is already the case in the USA. At least one EU member state, however, has already introduced variable deposit insurance fees.