In the new economy, central banks and bank regulators were all-powerful. In 2005, David Oddsson, the former prime minister of Iceland, became governor of Iceland’s Central Bank. Economist Brad DeLong mused: ‘It is either our curse or our blessing that we live in the Republic of the Central Banker.’1

In 1933 President Roosevelt argued for financial regulation:

The money changers have fled from their high seats in the temple of our civilisation. We may now restore that temple to the ancient truths … There must be strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money.2

Over ...

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