Almost a decade after the financial crisis, America's
regulatory framework is finally taking shape. Of course there's
more to come, and as usual, that's subject to no shortage of
complaints. The more alert readers will have spotted our cover
story, one borne of asking what US regulators might have done
differently after 2008. But in the interests of balance, a
defence should be made.
First, what did we expect? The crisis ripped a hole in the
fabric of financial innovation, and made a mockery of risk
models. It made a farce of selling many loans, traditionally
the assets of careful banks, into bustling secondary markets.
It caught many bankers, economists and policymakers fast
asleep. The Great Moderation ended in tears....