Continual learning in financial regulation

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Let's get a few things straight about our financial system. First, much to the surprise of everyone it weathered the global financial crisis.

Indeed, it did this so well, it is probably best we stopped using that phrase and instead call it the North Atlantic Financial Crisis.

Second, we have no real idea why our banks and financial institutions came through this scratch-free. The markets certainly didn't expect it and marked them down with the rest of the economy for a long time.

To be sure, we have theories. One theory is that our system of regulation was superior to most countries and prevented our banks from engaging in all of that subprime n…   [Read Full Text]