Four of us give our reactions:
Robert Litan
Lawrence J. White
Richard Posner
and yours truly.
I offer eight "audit findings" on the report, including
1. The Report does not offer a comprehensive analysis of the causes of the financial crisis.
2. The Report ignores the role played by housing policy in creating the financial excesses that preceded the crisis.
3. The Report ignores the role played by regulatory capital arbitrage in creating an unstable financial system.
4. The Report calls for a systemic risk regulator notwithstanding the probability that such an agency would be subject to the groupthink that caused the Federal Reserve, the International Monetary Fund, and other government agencies to misconstrue financial innovations as improving the distribution of risk in the financial system.
