The regulation and supervisory oversight of financial institutions is another critical tool for limiting systemic risk.

FORBES: Transcript

The report by the Financial Services Authority (FSA) said the bank nearly folded in 2008 due to poor management decisions, inadequate regulation and a flawed supervisory system.

BBC: Democracy Live site links

Dodd continues to champion an idea of creating a super regulator for bank safety and soundness, combining the supervisory roles of the two existing national bank and thrift regulators with the bank regulation duties of the Federal Deposit Insurance Corp. and the Federal Reserve.

FORBES: Financial Reform: The Legislative Logjam

The large literature on macro prudential regulation stresses the importance of using information obtained in the supervisory process to check for emerging bubbles and other imbalances.

FORBES: Euro Area Banking Union: Should Bank Supervision and Monetary Policy Be Separated?