As we enter the fall of 2011, three years after the Lehman Brothers crisis, Europe and the United States are teetering on the brink of another, potentially more serious, systemic crisis.

The banking industry suffered credit crises in the 1970s, 1980s, 1990s, and 2000s. An unavoidable conclusion is that its loan loss reserves were in all cases too small. 

Dodd-Frank overall is a poorly drafted statute that drastically expands the power of the federal government, creates new bureaucracies staffed with thousands, and does little to help the struggling American citizen.

We simply have to face the fact that banking is fundamentally risky. As I decided long ago when working in banks, the reason we needed to wear dark suits and have classic buildings was to look conservative in order to offset the real riskiness of what we were doing. 

The overall direction of the Commission majority's report was determined before the Commission started its work. Throughout its 18 month life, the Commission focused only on issues that the chairman wanted to cover, was more interested in publicity than in a thorough investigation, and never paid serious attention to other views. It was not in any sense an objective or thorough study, did not produce any facts or data that could aid scholars in the future.

It’s depressing to watch, but it is missing the point that the Volcker rule would not have prevented the loss and is probably unworkable.

AEI Resident fellow Alex Pollock examines past sovereign debt crises, especially the European crisis of the 1920s, in the context of the current economic situation for a piece in the latest Financial Services Outlook and the Wall Street Journal.

Judging by the financial market's renewed unease about Italy and Spain over the past week it would seem that all that the European Central Bank's €1 trillion liquidity injection in the European banking system bought was around four months of relative market calm.