Wouldn't the introduction of a public option be a simple fix? Rather than having the governments subsidizing the banks to provide student loans and mortgages, why not let the government get involved directly. Just nationalize one big bank and have it perform the activities that are necessary for the rest of the economy, i.e., classical boring banking stuff. The national bank should not pay high bonuses and should not be required to generate a big profit. In return, it would be underwritten by the government. Thus, the private banks would not be relevant to the system any more and could be allowed to fail as they like.

We absolutely need both limitation of size (the prevention of monopolies, which should also extend to healthcare and insurance currently), and regulation. There should be no such thing as Too Big To Fail, because this is an implicit admission of a monopolistic enterprise. So yes, either let's go balls to the wall and let banks--like any other business--fail dramatically, or let's decide that our economy doesn't want that kind of instability and impose government oversight that doesn't involve Wall Street.

We must force financial institutions to simplify, not obfuscate. Numbers do not lie if they are all in plain sight. Everyone in the chain must be held accountable, from credit-ratings to accounting, from loan originators...oh wait, maybe if loan originators actually had to hold onto their debt we'd never be in this situation in the first place.

If reason, justice and rule of laws and regulation do not apply to banks, financial institutions, corporations and the individuals responsible in them, then our freedoms and quality of life for the many are doomed! Justice does not require sacrificial lambs - it requires the "big fish". That would have a salubrious effect on the whole system. Those who escape justice will violate it again and again!

I do not live in the US though I studied at HBS back in the seventies and even now read a lot about the US. My view is that the US is being managed not by the POTUS or by the congress, but by the lobbyits of the interest groups and many socalled "THINK TANKS". The individuals pay far greater income tax than the corporates. The fuel tax is the lowest in the world if you ignore some OPEC countries.

If you look at your annual budget, the big portion of that cannot be even audited. Ask more about it from GAO - a government organisation.Contracts can be awarded without competitive bidding. There was a case of a defence related organisation paying $ 999,999 for delivering a small consignment a few hundred miles away in the US, just because the special courier company knew that nothing below one million is audited and checked.

If this is the way a country like US is managed, GOD only can help and HE is helping so far.

Although I am a product of a business school, I cannot say that our business schools are producing all honest and ethical students. There is so much emphasis on money and profits that the means take a beating. We are producing more greedy people than the country can absorb and hence you get all sorts of deals.

MAY GOD HELP THE US.

I think we also need to limit the amount of foreign ownership of large banks.

Financial crises are due to herding behavior.Making banks smaller or reducing their activities will not reduce systemic risk as long as regulation encourages them to follow similar policies. Capital thresholds and other 'minimum safety standards' ensure that banks' choices crowd capital markets.

All I know is that my when I called to ask for a lower rate on my credit card, my credit limit was cut. I'm paying tons of interest to my bank, and barely making it. Even with my income up, I'm scared to walk into my giant bank that uses our country's name to work out a better plan because maybe they'll call in my mortgage or cut my line of credit altogether. I'm only a credit risk because of their practices--I pay all of my bills. I feel like I'm dealing with the proverbial loan shark. I just need to pay and keep quiet or they'll break my thumbs kind of thing. Whether it's through regulation, size, or social pressure, financial reform really matters to the little people like me. These institutions need to know that there is a new sheriff in town, and he's taking names.

We have to reduce the size of the megabanks, with a mechanism for their dissolution in the event of failure. Regulation of banks is good but I do not believe that the regulators will be able to stay on top of all the creative schemes created by banks. The likelihood is that the government enforcers will tend to be at least one step behind the banks. Also, the megabanks are so big, I don't know if they could be regulated even if there was an efficient regulatory bureaucracy.

Enforcement is the key. What's the point of more rules without teeth? The system must be set up so those in charge must have their skin in the game. There should be serious consequences for those who made the mistakes.