it is dangerous for the world economy.
This distinction between what is in the interest of the banks and what is in the public interest was at the heart of Lagarde’s comments. Before 2008, a lot of people—politicians, journalists, regulators—conflated the two. Particularly in the United States and in Britain, General Motors chief Charlie Wilson’s argument that what was good for GM was good for America started to feel true about the economic powerhouses on Wall Street and in the City of London.
Lagarde runs the world’s most important public global financial institution. When most of us think of the IMF at all, it is usually as the stern enforcer of the sometimes harsh rules of international capitalism. That’s why we should take Lagarde’s call for tougher financial regulation particularly seriously. “My hope is that it’s improved for the public interest, not for the banks’ interests,” she told me. “And those are not necessarily one and the same?” I asked. She responded definitively and with a warm laugh: “Of course not!”