All rose as markets grew, and the economy remained firm, very few questioned this abnormal situation. For Paulson, the main problem that explains what happened is insufficient power that has so far had the Fed to control financial institutions: we should consider quickly which is most appropriately give the fed the authority to access necessary information from highly complex financial institutions and the responsibility to intervene in order to protect the system, that can carry out the role that expects our nation: stabilizing system in general when you see threatened. But the question now is how to make financial institutions think that they will not have the support of the Fed face a crisis after such demonstration. Financial institutions know that faced a situation of generalized crisis, the Fed will come to his aid. Then the real question not passes by making them believe financial institutions that the Fed will not come to the rescue, but prevent them from making operative risky that the they can lead to an emergency situation.
If regulatory amendments are to increase capital and liquidity or higher informational requirements and control over financial institutions requirements, it is likely, although they are needed, they are insufficient to avoid the next crisis. The subprime crisis, it showed the problem of regulation and supervision through the lack of a comprehensive control of all entities involved in the financial system. Does not contemplate a regulation and comprehensive supervision of them, in their quest for profitability will find the way to transfer and transform risks such which have done with mortgages subprime. For U.S. investors, it is likely greater regulations limit the offer of financial products and thus the expected profitability. This isn’t bad if it avoids inconsistencies are generated in the financial system that could lead to a new crisis, which, as I commented before, not is completely safe.