Jan. 9 (Bloomberg) -- The financial markets need regulation
the way a nuclear-power plant needs a cooling agent for its
radioactive fuel rods. If safety rules are enforced and the heat
of the rods is properly controlled, the result can be clean,
abundant energy. But if that cooling process is neglected, there
could be a meltdown.
Similarly, capital requirements are the cooling agent of
risk-taking in the economy. And just as nuclear fuel will always
be reactive, people will always be greedy. We need to enforce
rules to balance natural greed with capital requirements so that
greed can create productive risk-taking and competition -- not
short-term extraction. Here are five possible ways to do that.