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STEVE CHIOTAKIS: Right now we're gonna ask the big question. It comes a day after central bankers approved major reforms they say will help the financial world avoid another crisis. Meeting in Basel, Switzerland, regulators agreed yesterday to force banks to triple their amount of capital reserves -- spare cash they can use in a crisis. But the regulations will be phased in over the next decade. Matthew Bishop is the U.S. editor of The Economist magazine. He's author of the book, "the Road from Ruin." He's with us on the line this morning. Good morning, sir.

MATTHEW BISHOP: Good morning.

CHIOTAKIS: Will this prevent another crisis?

BISHOP: Well the unfortunate answer is not necessarily and it's not even clear that the rules would have prevented the last financial crisis. There's a simple idea, which is that the more risk a bank takes the more it should have a big pile of money sitting on the side that it can use just in case thngs get worse than is expected. But the trouble is figuring out how big that pile of money ought to be is extremely difficult. And the rules are very complicated. These rules aren't even going to be phased in, as you say, or finally phased in, until 2023. And by the time the banks may well have moved on and have a completely different business model for all we know.

CHIOTAKIS: It could be a very different financial world. How does this fit, sir, into the American regulatory framework then?

BISHOP: I think American banks always had some requirement to keep money, capital, aside in this way. If it's implemented in the way that is planned, it will mean they have to keep a lot more money on one side, which means that they will lend less, which probably won't be all that great for the economy. But the regulatory reforms that have gone through Washington -- although I have a lot of questions about them -- what they have cleared up is what the government can do when the government can get in a legal mess. Hank Paulsen famously thought that he didn't have the legal powers to rescue Lehman Brothers. Well now it's clear that the government does have the power to rescue a bank like that. What Basel is about is trying to stop the mess from happening. And I think that's a much, much harder question and we haven't really got a solution to that problem.

CHIOTAKIS: Matthew Bishop, U.S. editor of The Economist magazine. Matthew, thanks.

BISHOP: Thank you.