I'm really concerned that too-big-to-fail has become too-big-for-trial.
A bank needs models to measure risk. The problem, however, is that any one bank can measure its risk, but it also has to know what the risk taken by other banks in the system happens to be at any particular moment.
The Libor system is structurally flawed. It is a major problem for our financial system and for the confidence in the financial system. We need to address it.
Financial innovation is an oxymoron. It's very rare that there is something that's actually financial innovation. It's a euphemism for hiding leverage.
The Fed should not be responding to the ups and downs of the markets, and it is certainly not our policy to do so. But when there are significant financial developments, it's incumbent on us to ask ourselves what is causing them.
I and others were mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.
In 2008 we came perilously close to killing money, exposing in the process how out of date money's infrastructure has become.
If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution.
