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In remarks made by Gary Stern, President of the Federal Reserve Bank of Minneapolis, to the 35th Annual Conference on Bank Structure and Competition, on May 1999, he said: "I propose combining market signals of risk with the best aspects of current regulation to help mitigate the moral hazard problem that is most acute with our largest banks ... The actual regulatory and legal changes introduced over the period-although positive steps-are inadequate to address the safety net's perversion of the risk/return trade-off."
This might well be true. Yet, nascent capitalism is not without historical example. The study of the birth of capitalism in feudal Europe may yet lead to some surprising and potentially useful insights. Feudalism was the countryside's reaction to this damnation. It was a Hobson's choice and an explicit trade-off.
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