The president wants to get tougher on the nation’s financial institutions, but can he? Six top money minds weigh in on his plans to regulate risk, control executive pay and protect consumers. Robert Pozen addresses the risk of moral hazard.

As Rahm Emanuel, President Barack Obama’s chief of staff, once said, “Never let a serious crisis go to waste.”

But the current financial crisis won’t be the catalyst to rethink fundamentally the structure of U.S. financial regulation. Instead, Congress will fill a few holes in the regulatory foundation, and install new radar for detecting systemic risk within the existing framework of regulation according to financial function or service. Unfortunately, in some cases, that’s too little, too late.

What shape is financial regulation ..read more

Thank goodness that statute was gone when it came time to rescue Merrill Lynch and Bear Stearns.

It is a mistake to give the central bank vast new regulatory powers.

Four little words have cost U.S. taxpayers dearly in government bailouts of once-mighty Wall Street firms. Congress can put an end to such costly rescues, says HBS professor David A. Moss, and the Federal Reserve could be a super regulator, adds senior lecturer Robert C. Pozen. But will Congress enact the regulatory cure that is required?

Professor Robert Pozen leads an HBS class discussion on Washington’s response to the economic crisis.

Turmoil On the Street: Washington Responds To the Global Crisis [Robert Pozen]