I'm all in favour of democracy, as we all should be. The recent election was vastly better as a way of changing who is in power. I'm also all in favour of certain things not being subject to politics but to straight technocratic rule. This is the way it should be done no matter who is in power -- the result of that democracy. There's a certain tension between those two.

One of the places where this is most acute is in the independence of the central bank. Bangladesh Bank needs to be able to do two things. One is to react to the government's fiscal policy -- the decisions upon tax and spending.

This might mean increasing interest rates, decreasing them, to prepare the economy, to stabilize the economy, according to what the democratically-elected government is doing.

The other is in the oversight of the banking system in general. Making sure that loans are being made on the basis that they will be repaid, for example, and not on the basis that a state-owned bank will issue loans to friends of those democratically-elected to run the state.

The major problem with the Bangladeshi banking system today is the rise in non-performing loans. Money that was lent to friends of the previous regime that won’t be repaid. Because those loans were made on a political, not business, basis.

Now, what we do about those is clear and well known. We demand the money back from those who got it. Many of whom don't, in fact, have it. Fine, so we bankrupt them. We do not do this because they were friends of the past regime. We do this because they owe money to the banks.

We also know this isn't going to sort out all of the banks. Some of them have lent too much upon these political grounds and are, to all intents and purposes, bust.

So, we either recapitalize them -- pay the losses from taxation -- or we lose large parts of the banking system.

An economy without a banking system is a bad and poor place -- so, we're going to have to just swallow hard and pay up as taxpayers.

All of these are things I've said a number of times in this column before. Sorry, it's just true. The previous politics pillaged the banking system and we're going to have to pay for that.

But the big thing, the important one, is that we don't allow this to happen again.

Yes, politics has changed and so will -- should -- much about how the country is governed. But we need to not repeat the mistake of last time around, that banking, the issuance of bank loans, is something determined by politics.

And, well: “Earlier, the government removed Ahsan H Mansur from the post of governor of Bangladesh Bank” and the new Finance Minister said: “A new government has come in with its own preferences and policy thinking. Naturally, adjustments will be made in different institutions to align with its programs.”

That could be thought of as worrying. The replacement of the Central Bank Governor is to change who makes sure politics doesn't determine loans? Or to enable?

As this column has been saying for years now, the political determination of who can borrow is the problem with the Bangladeshi banking system.

That problem we've all got to pay for in recapitalizing those banks. Democracy changing the government is excellent.

Democracy that changes who gets easy loans is a bad idea -- because those loan decisions, the regulation of the banking system, need to be things outside democratic politics.

Tim Worstall is a senior fellow at the Adam Smith Institute in London.