Holding Back the Flood

More financial regulation will mean less financial innovation. Maybe that's not such a bad idea

Illustration by Harry Campbell for TIME

Financial regulation is usually born of financial disaster. The Panic of 1907--during which several big New York City banks actually did fail--led to the creation of the Federal Reserve. The Great Depression, unleashed by a market crash and countless bank runs, gave us the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Glass-Steagall Act separating banks from Wall Street. Now we're up to our elbows in another mess, albeit one that has yet to acquire a name for the ages. (Credit crunch? Subprime meltdown? Give me a break!) And so, as foreclosure follows reset subprime loan, talk has...

Want the full story?

Subscribe Now


Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!