Financial Crises Require Governments.

In The Financial System We Have Today, With Less Risk Concentrated In Banks, The Probability Of Systemic Financial Crises May Be Lower Than In Traditional Bank-centered Financial Systems

Monetary Policy Itself Cannot Sensibly Be Directed At Reducing Imbalances.

The Major Economic Policy Challenges Facing The Nation Today - Pick Your Favorites Among The Usual Suspects Of Low Public And Household Savings, Concerns About Educational Quality And Achievement, High And Rising Income Inequality, The Large Imbalances Between Our Social Insurance Commitments And Resources - Are Not About Monetary Policy.

The Government Can Help, But We Need To Make This Transition Now To A Recovery Led By Private Investment.

Looking Past The Immediate Crisis, A More Resilient System Must Be Built On Stronger And Better Designed Shock Absorbers, Both In The Major Institutions And In The Infrastructure Of The Financial System.