These include proposals to create special charges on firms based on their systemic importance, to require contingent capital that would be available in periods of stress, and to counter pro-cyclical tendencies by establishing special capital buffers that would be built up in boom times and drawn down as conditions deteriorate. Each of these ideas has substantial appeal.
A number of thoughtful proposals are being discussed, though each idea presents considerable challenges in the transition from good idea to fully elaborated regulatory mechanism. Yet to gain traction are proposals for what might be termed structural measures – that is, steps that would directly affect the nature and organization of the financial services industry. But discussion of such concepts is clearly increasing.