June 25, 2012 12:17PM 

# New Bank Regulations Spawn Doom Loop 

By [Steve H. Hanke](https://www.cato.org/people/steve-h-hanke) 

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Politicians have a genius for creating unintended consequences with each of their new firefighting measures. Just consider bank regulations. Today, reportage by Brooke Masters in the [*Financial Times*](http://www.ft.com/intl/cms/s/0/5bc26926-bded-11e1-9abf-00144feabdc0.html) informs us that the bill for new bank regulations in the EU could balloon to 50 billion euros. These regulations are intended to make banks “safe.” But, alas, they will [suppress the money supply and economic activity](https://www.cato.org/publications/commentary/its-money-supply-stupid). In consequence, new bank regulations, in the middle of an economic slump, promise to make banks less, not more, “safe” — a doom loop. Now is not the time to send in the Boy Scouts.

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