This policy workshop is occasioned quite obviously by the events of the last several years and the enormous expenditures that resulted, as losses cascaded through the financial system (and beyond) and governments shifted those losses to taxpayers in an effort to combat a severe recession or worse. There is now agreement by all that this experience should not be repeated, but the first step is to understand how such huge losses were created. Can we institute some regulatory reforms that give us confidence that it will be prevented from happening again? Are there better ways to deal with the problem of financial institutions that are “too big to fail”?

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