Rather, there is a need for strengthening the existing institutional framework by enhancing those general principles that ensure a smooth functioning of market economies: stability-oriented macroeconomic policies; high competition on all markets; the protection of property rights; freedom of contract; and unlimited liability. As regards macroeconomic policies, they have to be medium term oriented and geared towards price stability and sound public finances.
A little more than 10 years ago, the United States and the world teetered on the brink of economic catastrophe. What was urgently needed was a way to restore confidence in the financial system—a daunting challenge. Neither the banks, nor the regulators, nor the public had a reliable sense of the strength and resilience of our major banks.