First, one clear lesson from the crisis is that banks’ risk absorbing capacity was way too low. Therefore, Basel III substantially raises capital requirements, reducing the probability of bank failures and the associated risks to financial stability and to taxpayers. Second, while risk measurement will never be perfect, simplicity can sometimes come at a cost, too.
The Federal Open Market Committee has to weigh the risk of slowing the economy unnecessarily against the risk of waiting too long and having to put the brakes on harder later. Waiting longer may increase the possibility of overheating followed by recession. It's a tough call. I can't promise we will make the right decisions, but I can promise we will try.