A Potential Solution for Future Financial System Woes

In what often seems to be a neverending battle between financial institutions on one side and regulators on the other, it seems that both sides have found a bit of common ground as they come together in an attempt to avert future financial meltdowns. Although details are at this point non-existent, and though it is likely going to be some time before anything solid is in effect, many in the financial industry voiced support this week for some form of a global insurance scheme whose goal would be the avoidance of taxpayer bailouts in the event that a key cog in the financial machinery needed to be saved.

This seems to be a sensible solution to the 'too big to fail' problem whereby certain financial institutions become so entangled with others that the collapse of one would creat a domino effect that would impact the whole system. During the recent crisis, the solution was government interference, probably inevitable, but also undesirable in a capitalist system and with taxpayers footing the bill.