Delamaide: Nobel economist talks tough on banks

WASHINGTON — Governments need to intervene to “tame” giant firms in banking and other industries where a few companies dominate the sector, according to the latest Nobel Prize winner.

“The science of taming powerful firms” is the way the Nobel Prize committee this week summed up the research on government regulation by the newest laureate in economics, Frenchman Jean Tirole.

Classic economics teaches us that competition will normally make companies act in the public interest because they will strive to succeed by delivering high quality at low cost.

“But many industries are not very competitive, and this lack of competition widens the scope for beneficial public intervention,” the prize committee said in its citation for Tirole, who is affiliated with the University of Toulouse.

Read on.

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