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Banks Quote by Paul Krugman

“Close the weak banks and impose serious capital requirements on the strong ones...You see, it may sound hard-hearted, but you cannot keep unsound financial institutions operating simply because they provide jobs.” quote by Paul Krugman
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“Close the weak banks and impose serious capital requirements on the strong ones...You see, it may sound hard-hearted, but you cannot keep unsound financial institutions operating simply because they provide jobs.”

Paul Krugman

About This Quote

Source Speech: Economic Policy Forum, 2010

Advocates strict regulation of weak banks while allowing strong banks to operate with fewer constraints, arguing that unsound institutions should not be kept alive solely for job preservation.

In simple terms: Regulate weak banks, keep strong ones flexible.

Key Takeaway

Targeted regulation improves stability.

Themes

finance regulation risk management

Mood

analytical critical

Type

policy economic

When to use this quote

  • government policy
  • banking sector
  • public debate

Key Concepts

macro‑economics policy systemic risk

Questions to Reflect On

  • How can we balance stability with fairness?
  • What safeguards protect against over‑reliance on strong banks?
A Different Perspective

The approach may increase inequality between institutions and overlook systemic interdependence.

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