I recently gave a talk and itemized my principals for bank regulation. They are:

• Keep it simple
• Preserve correct incentives
• Minimize political influence
• Maximize market feedback
• Minimize moral hazard issues
• Regulation is not protection

Our friends at KERN Economics have come up with a plan that meets all of my criteria. It also has the desirable characteristic of having successful working examples, examples that were unfazed by 2008’s meltdown. Good original thinking. Read it here.