The global financial crisis (GFC) has brought unprecedented challenges to the world economy and numerous demands for regulatory improvements of its financial architecture. China has not been immune from these challenges. Their impact upon its domestic economy has been profound. Like many...

A tax on the harmful elements of finance — a tax on systemic risk — would raise revenue and also lower the likelihood of future crisis. Financial institutions, which pay the tax, would try to minimize its cost by lowering their systemic risk. In theory, a tax on systemic risk is perfect...