This means taking account of the relationships among the circumstances and activities of significant financial actors through such channels as funding dependencies and correlated assets. The financial crisis has made what was formerly a minority view—the need to incorporate systemic considerations into the regulatory regime—into something approaching a consensus.
But this shift of perspective—whether in pedagogy or in policy—raises as many questions as it answers. My remarks this morning will detail some of the questions that have recurred in regulatory deliberations in recent years, which I believe to be salient for policy, scholarship, and pedagogy.