Lorenzo Bini-Smaghi, a member of the European Central Bank's executive board, has blamed regulators' failure to rein in the excesses of the boom years on weaknesses that arise when democratically-accountable institutions make financial policy.
"At the root of the crisis is the regulatory and political capture of supervisors. It leads them to favour short-term priorities over medium-term stability," Bini Smaghi told an audience in Siena on Friday. "Politicians are inevitably induced to aim at ach
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