If we’ve learned anything from the bailout of Wall Street, it’s that sensible policy making is difficult in the midst of crisis. Embracing new regulations now—while the financial industry remains in distress and emotions still run high—is the wrong strategy.
Instead, a blue-ribbon panel of diverse financial experts should first be established to understand more fully what went wrong in the financial system. The Council of Regulators proposed in the congressional banking reform bills seems like a good place to begin. Then lawmakers and business leaders should devise smart policies that drive at the heart of the problems that led to the financial collapse. Here’s a start