Bank mergers add to reasons for optimism

The government’s plan to merge several state-run banks is another step in the right direction towards fixing the beleaguered system. It follows a recent increase in the size of the recapitalisation package and strengthening of the bankruptcy code. But more still needs to be done. In particular, it is important for the economy’s long-run health that the practices that led to the build-up of bad debt are not allowed to reappear.