Conclusion The standing of market-oriented principles is being severely tested. Our policy response must be worthy of this challenge, and so should necessarily be broader in scope than some new team of financial regulators with new powers. We need a new financial architecture, one in which improved regulation and supervision play an important but co-extensive role with greater market discipline.
The new architecture must stoke competition, allow failure, and reward innovation and success. The new architecture should establish the rules of the game without micromanaging the affairs of private firms. And the new architecture should not give perpetual license to select, incumbent firms to dominate the financial landscape. For in the new regime, no firm should be too big to fail.