"Too big to manage" & "too big to fail"

Accordingly with Howard Davies

"[...] The overriding conclusion that emerges from any analysis of these unhappy events is that nothing will ever be the same again: the relationship between the state and the markets needs to be rethought. A new “social contract” between finance and the people, through their governments, is required."

"That is easy to say, but governments, individually and collectively, are still struggling to redefine the terms of that contract. Progress has been painfully slow, partly because officials have been fire-fighting, and partly because urgent domestic political imperatives compete with the desire to establish new, globally applicable mechanisms that would provide a stable underpinning for the international financial system and prevent regulatory arbitrage and the de-globalization of finance."

Our distrust is very expensive

It can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence. Kenneth Arrow

Accoringly with Davies:

"That fall in confidence affected banks, the stock market, and the government and its regulators. Furthermore, the survey [Financial Trust Index] showed that declining trust was strongly correlated with financial behavior. In other words, if your trust in the market and in the way it is regulated fell sharply, you were less likely to deposit money in banks or invest in stocks. So falling trust had real economic consequences."