This conference provides the ideal occasion and audience for me to elaborate on that request and, indeed, to expand it by suggesting a broader range of topics on which the questions and perspectives of Industrial Organization (IO) may be relevant to financial economists probing the nature of systemic risk and the causes of financial crises.
Before addressing this subject directly, let me take a few minutes to place it in the context of the changes in regulatory focus motivated by the financial crisis. The familiar, “microprudential” approach to regulation focuses on risk within individual firms.