The debate on banking regulation has been dominated by flawed and misleading claims. The title of our book The Bankers New Clothes: What's Wrong with Banking and What to Do About It (Princeton University Press, 2013, see bankersnewclothes.com) refers to flawed claims about banking and banking regulation, and the book discusses and debunks many of them.Flawed claims continue to be made in the policy debate about banking and financial regulations, most recently in the context of proposals to weaken regulations meant to reduce the excessive reliance of banks on debt funding. Because the financial system remains dangerous and distorted and because regulations to reduce indebtedness, if properly designed and enforced, would be highly beneficial for society, flawed claims about the issues must not win the policy debate.This document provides a brief account of claims that we have come across since the book was published in February 2013. We provide brief responses, with references to more detailed discussions in the book and elsewhere. Many claims are asserted without any justification. Some are simply false or based on fallacious reasoning. Others are misleading or irrelevant, for example confusing costs and benefits to banks or bankers with costs and benefits to society, which must be the focus of policy. Still, other claims are based on myths, i.e., implausible theories that ignore important parts of reality and are protected by the use of special jargon.We first provide a list of the flawed claims that the rest of this document takes on. References to chapter numbers refer to our book. Nothing that we heard or read changes our conclusions or our strong policy recommendations.
