The terms of the social contract between banks and the state have recently worsened, writes Andrew Haldane, the executive director for financial stability at the Bank of England, in a new paper.

The paper notes that at least over the past century, there is evidence of a ratchet in the scale and scope of state support of the banking system. Whenever banking crises strike, the safety net has bulged and like over-stretched elastic, it has remained distended, the research notes.

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