There are growing concerns that the regulatory bodies overseeing the financial sector are incapable of understanding, preventing or even properly investigating excessive risk taking that threatens to ruin the economy.
This issue was raised before the 2008 financial crisis and received more attention during the debate that led to the 2010 Dodd-Frank financial-reform law. Some tweaks were made in various parts of the regulatory apparatus, including the governance of the Federal Reserve Bank of New York, to reduce the influence of Wall Street.
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Simon Johnson, a professor of global economics and management at MIT Sloan, is the former chief economist at the International Monetary Fund and co-author of “White House Burning: The Founding Fathers, Our National Debt, and Why It Matters To You, and 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
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