A recent article in The Conversation said that after the failure of Silicon Valley and Signature banks, politicians began exploring whether the banking industry needs more government intervention. Senator Elizabeth Warren and U.S. Rep. Katie Porter introduced a bill that would impose tougher banking regulations.
Meanwhile, Bloomberg opinion columnist Tyler Cowen said, “Regardless of what laws are passed, or which regulations are issued, banking crises will recur — and not infrequently.” Cowen noted that “any regulatory regime is a temporary patch, not a permanent solution.”
When might we see tougher banking laws? The Socionomic Theory of Finance said that massive tightening of financial market rules typically happens after a negative mood extreme, as regulators seek to protect investors from the crash that has already happened.
The November 2021 issue of The Socionomist said it’s not unusual for the timing gap from negative mood extreme to new rules to be about one year. To learn more, read “The Timing and Character of Investment Legislation.”
If you look closely, you can see patterns in social mood that help you predict social trends. Learn more with the Socionomics Premier Membership.