Q. What specific changes would you make to financial oversight of banks and financial institutions in the U.S. so that no single large entity could pose a systemic risk to the economy? Would you like to see more or less power given to the Federal Reserve Board? Would you favor a new federal regulator to oversee financial products sold to consumers?

A. The issue of financial regulation in our country is a difficult and complicated one. For every instance where more regulation may have been helpful (i.e. derivatives or credit default swaps) there is another where problems were caused by overregulation (i.e. market disruptions caused by the Community Reinvestment Act or political manipulation of Fannie Mae and Freddie Mac). In general, I believe in the self-correcting nature of markets. That said, the government does have a role to play in making sure that markets are transparent and fairly run. As for ensuring that no single entity is so large as to cause a systemic risk to the economy, I cannot think of a single entity in that position that did not get there because of government involvement. If the government was not involved in these entities in the first place a lot of the crises of the past year could have been averted. Consequently, I am not in favor of granting expansive new powers to the Federal Reserve Board or to establishing a new regulator to oversee financial products sold to consumers. I do believe, however, that the SEC, FDIC, and Fed may have been lax in enforcing existing laws and would favor a commission to look into these omissions and recommend areas for enhanced enforcement.