Bank capital
Why it’s a problem: Without adequate capital reserves, banks are vulnerable to quick drops in the value of their assets, leaving them unable to make good on short-term loans.
How bad it could get: A Lehman Brothers repeat—cascading failures of banks or “shadow banks” in which borrowing and lending would grind to a halt.
What we can do about it: Strictly enforce capital requirements, with no loopholes, for banks and shadow banks alike.
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