Monday, March 31, 2008

Quote of the day 

Supervising the very complex derivative products of the banks and of the rest of the financial system would be an enormous technical challenge. The institutions themselves -- paying very high salaries and having their own survival at risk -- got it wrong. Would the Fed get it right?

Martin Feldstein, from the Wall Street Journal this morning. A useful rule: Regulators regulate when they have access to better information than the regulated. But also useful: Regulation to minimize systemic risk. Can the Fed do better?