A single regulator tasked with preventing threats to systemic stability would need to have considerable power and discretion. But creating such a powerful entity could reinforce the moral hazard problem resulting from the idea that some firms are too big to fail.

Bank examinations, like the recent "stress test," yield information of interest to the market. Releasing those results may increase transparency. For routine annual bank exams, however, doing so could impede a supervisor's ability to collect information.

Simply looking at unadjusted versions of traditional statistics may not be the best way to compare the state of the current economy to previous periods. When comparing recessions, it is important to account for demographic changes.

Many states give mortgage lenders strong legal means by which to pursue debt collection in the event of a mortgage default. In those states, probability of default is lower and the forms the default takes are often quite different from a costly conventional foreclosure.

The expansion of the federal financial safety net has increased the incentives for financial firms to take on more risk than they would have otherwise. Yet current regulatory reform proposals do not address this root cause of financial instability. Sharply curtailing the financial safety net is...

In recent decades, income inequality has increased. But this doesn't mean that those with lower incomes are relatively worse off.

Related links : http://www.richmondfed.org/publications/research/region_focus/2010/q2/federal_reserve_weblinks.cfm

Related links : http://www.richmondfed.org/publications/research/region_focus/2010/q2/cover_weblinks.cfm

Perhaps the most important lesson to take from the Great Depression is that policymakers should follow the Hippocratic Oath: First, do no harm.