In particular, the U.S. government lacked any workable means to address the potential disorderly failure of a large, systemically important firm in a way that protected the economy and taxpayers from severe collateral damage. With the crisis largely behind us, we as a country must now turn to fixing structural weaknesses in the financial system, in particular in the regulatory framework.
We need tough new rules to make financial institutions safer and to constrain excessive risk-taking, and we need a regulatory framework that gives the Federal Reserve and other agencies the ability to address risks to the financial system as a whole.