A broad statement of principles on regulatory capital, which provides no specific numbers whatsoever, and the majority of which is simply a reiteration of the June white paper, is not “the Geithner plan.” Treasury already sent legislative language for its entire financial reform to Congress, for god’s sakes! (Maybe you should give that a gander.)

I don’t imagine that this will stop bloggers from denouncing the numbers-less statement of principles as too “weak” though.

Since I think that this is what occurred, I like the fact that many of the reforms are addressed at keeping this from occurring again.

For that reason as well, I thought that this was a good idea:

“For these reasons, banking firms should be subject to an explicit liquidity regulation regime. The liquidity regime should be independent from the regulatory capital regime. The liquidity regime should make both individual banking firms and the broader financial system more resilient by limiting the externalities that banking firms can create by taking on imprudent levels and forms of funding mismatch. Introducing strict but flexible liquidity regulations would reduce the chances of destabilizing runs by enhancing the ability of debtor banking firms to withstand withdrawals of short-term funding and by making creditor banking firms less likely to withdraw short-term funding from other firms. The new liquidity regulations should be considered a complement to – and not a substitute for – careful, intensive, firm-specific supervision of each banking firm’s liquidity risk management practices.”