The financial sector has become increasingly complex in terms of its speed and interconnectedness. This column says that market discipline won’t stabilise financial markets, and complexity makes regulating markets more difficult. It advocates substantial intervention in order to restructure the banking industry, address institutional complexity, and correct misaligned incentives.

Nowadays, the division of labour has become much more detailed as the production of most goods involves the coordination of a wide range of occupations. At the same time, white collar work involving generating, storing and communicating information has increased in importance in all firms and organizations. The author of DP6358 finds that this more complex division of labour has led to higher costs of processing information and consequently a raised demand for clerical office workers.