"An apparent temporary narrowing of income inequality has been observed during several recent banking crises. But it would be a mistake to conclude that such crises don't matter for the poor. For one thing, the correlation is not strong, and the opposite pattern has also been present. Besides,...

"Caprio and Honohan question the widespread belief that market discipline on banks cannot be effective in less developed financial environments. There is no systematic tendency for low-income countries to lack the prerequisites for market discipline. Offsetting factors to the weaker market and...