“The Three Steps to Financial Reform”
Financial Times, June 16, 2009
The Obama administration is expected today to propose a reorganization of the way we regulate financial markets. I am not an advocate of too much regulation. Having gone too far in deregulating—which contributed to the current crisis—we must resist the temptation to go too far in the opposite direction. While markets are imperfect, regulators are even more so. Not only are they human, they are also bureaucratic and subject to political influences, therefore regulations should be kept to a minimum.
Three principles should guide reform. First, since markets are bubble-prone, regulators must accept responsibility for preventing bubbles from growing too big.
Alan Greenspan, ...