“The regulatory system in the U.S. is hopelessly outdated, outmoded. It’s not just a matter of too little regulation. It’s a matter of the wrong regulation. The big parts of the mortgage origination industry weren’t even regulated to any great extent. It was state regulation and very inadequate. The power to look across the financial system and deal with systemic risk, no one had that.”
— U.S. Treasury Secretary Hank Paulson last night on Charlie Rose, explaining the need for a stronger Federal Reserve, broader government oversight, and better coordination with regulators around the globe.