Shortly after the speech, I received an e-mail from an old and esteemed colleague, Professor Athanasios Orphanides, with the subject line “I’d rather have Bob Solow with a model and a rule (following a careful evaluation process).” What does a careful evaluation process entail?
The current regulatory and supervisory standards we have set together are an important lesson from the financial crisis and it would be a mistake to roll them back. I am convinced that in the long run, well-capitalised and strictly supervised financial systems are the most successful ones.