Quite understandably, the crisis has triggered a number of questions about financial innovation. Is all financial innovation for the good? Are there good and bad innovations? What determines if an innovation is good or bad – the innovation itself or the way it is used? Who is to determine if an innovation is good or bad?
This rule would be binding on the Board and on all staff of the Federal Reserve System, including bank examiners. There are of course other ideas I have mentioned and will be pursuing, but this partial list should be informative and helpful in illustrating the earlier themes I mentioned.