Should Increased Regulation of Bank Risk-Taking Come from Regulators or from the Market?

The article focuses on the issues with the financial safety net protecting debt holders as well as depositors of financial institutions in the U.S. It is noted that the recession has recreated much of the intellectual and policymaking environment despite the progress happening in macroeconomics modeling. The author stresses the presence of the short-term emphasis given on financial intermediation revival along with the depression.