Financial Policy’s Hidden Role in Economic Inequality — and How to Fix It
By Karen Petrou

Right after he was inaugurated, President Biden told federal regulators that they must henceforth consider economic inequality and racial equity. This is an overlooked but critical change — the United States can’t have robust economic growth without economic equality and, the more unequal we get, the greater the odds also for still more frequent and destructive financial crises. The rules Biden has in mind are those that deal with fair housing, taxation, environmental justice, and other recognized sources of inequality. However, economic inequality is at its root about money and nothing moves money as powerfully as monetary and regulatory policy. Thus, as my new book makes clear, equitable policy must also prioritize rapid reform of financial policy. And, unlike many other reforms, equitable financial policy generally doesn’t take new law; all it needs is new will.