Banks, Power, and the Decline of Democratic Accountability

Stanford Professor and CASI Faculty Director Anat Admati traveled to England, Iceland, and India this summer, delivering a series of lectures on global banking risks, eroding democratic institutions, and the urgent need for trustworthy systems.

On June 10, Admati delivered a keynote, “Financial Power, Public Trust, and Democratic Erosion,” at a political economy research conference hosted by Bayes Business School in London, in partnership with the School of Policy and Global Affairs at City University of London, and the London School of Economics and Political Science (LSE). She argued that little has changed in banking regulation since the 2008 financial crisis. Politicians and regulators, she warned, still “coddle” banks as presumed allies, allowing distorted incentives and weak rules to persist.

Tracing the origins of the banking safety net to U.S. deposit insurance in the 1930s, Admati described how government guarantees have expanded over time and shielded financial institutions from the consequences of their own risk-taking. She criticized international frameworks such as the Basel Committee for producing “spectacularly bad” rules that increase systemic fragility rather than reduce it. Case studies ranging from the Greek debt crisis to HSBC’s money-laundering settlement reinforced her point that banks repeatedly break the law with minimal consequences, protected by political and regulatory reluctance to impose real accountability.

This special treatment, Admati noted, fuels public disillusionment, weakens democratic accountability, and contributes to the rise of populism across the Western world.  Admati urged academics and professionals to resist complacency and use their platforms to challenge the structural failures of the financial system. While acknowledging the frustrations of advocating for reform, she stressed the responsibility of scholars to question entrenched narratives rather than accommodate them.

On June 18 at the University of Iceland, Admati delivered “The Power of Finance, Public Trust, and the Decline of Democracy.” Opening remarks were given by Jón Atli Benediktsson, Rector of the University of Iceland, followed by an introduction from Guðrún Johnsen, Dean of the School of Business at Bifröst University. The lecture was moderated by Sigríður Benediktsdóttir of Columbia University and the University of Iceland.

Again, she called on academics and professionals to resist these forces by strengthening accountability and engaging more directly with public policy debates.

In July, she addressed the Centre for Analytical Finance at the Indian School of Business in Hyderabad, delivering a keynote at the summer research conference. Across these events, the response underscored a global appetite to understand how financial power shapes markets and politics. Concerns are mounting over wealth inequality and unfair practices that distort competition, trends that, Admati warned, could undermine stability absent credible, enforced rules and institutions.