First panel deals with

James Kwak: Funding costs were overly low at the major banks.  Alleges too big to fail, but big banks were highly rated.  My experience is that small banks equally good as large banks have much higher fundung costs.

Richard Carnell: hits the nail on the head — Regulators had the power to act and did not.  No political constituency for tight capital standards and higher capital levels.  So bankers argue from a concentrated political interest, and there is no political interest for solvency in good times.

F.M. Scherer — argues that too many mergers were allowed to occur, and that there were too much profits in the financial sector.  Not sure why this guy was invited.  Very long-winded, but with little new thought.

Jennifer Taub: focuses on the repo market and other short-term financing markets.  Why do banks get to finance long assets short?  Really seems to be a failure of basic Asset Liability Management.

Elizabeth Nowicki: Directors and Officers need liability and personal penalties like disgorgement of bonuses for excessive risk taking.

Good bond investors ignore ratings and read reports.  Rating agencies get blame, but much of it should go back to the regulators who require use of ratings.

Focusing on assets is a loser here, because it is liquid liabilities that lead to failure.  Focusing on funding structures would have the greatest impact on solvency.

Dean Baker makes the good point that the Fed Chairman and other regulators should have been fired as well.  Carnell added that the three thrift regulators appointed by Reagan — the first two were destructive, but the third got the blame.

Commenter/questioner brings up off balance sheet liabilities.  All assets and liabilities that affect cash flows should be brought on balance sheet for regulatory purposes.

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