Americas: Defending the regulators

Author: | Published: 21 Mar 2016

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....