But we need to make adjustments in such a way as to preserve the benefits of highly innovative financial markets where many advances have enabled risks to be better diversified and credit more readily available to more people.
Whatever type of backstop is put in place, in my view greater regulatory attention will need to be devoted to the liquidity risk-management policies and practices of major investment banks. In particular, these firms will need to have robust contingency plans for situations in which their access to short-term secured funding also becomes impaired. Commercial banks should meet the same requirement.