01/10/2013 08:52 am ET Updated Mar 12, 2013

Simon Johnson: Our Financial System Just Took A Major Step Toward Becoming More Dangerous

The fundamental assumption of modern bank regulation is that nations need to coordinate, and they negotiate the relevant international standards in the Swiss city of Basel, home to the Bank for International Settlements, under whose auspices such negotiations are held. The United States has an important seat at the table, but so do the Europeans and others. These negotiations are shaped by three main forces: the United States, Britain and the euro zone, with Japan often siding with the euro zone. (It's one country, one vote, so this can easily go against the United States.)

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