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

Almost exactly one year ago – on September 15, 2008 – Lehman Brothers filed for bankruptcy, a collapse that many think tipped the world into the gravest financial crisis since 1929. Could the situation have been handled better?

Join the discussion and read moore on Pozen’s post, the first of his series on the financial system appearing every Monday in Harvard Business Voices: Conversation Starter »

SDRs have less potential than suggested by China. They could not become a viable global currency in their present form. Swaps with the IMF for SDRs would provide central banks with a convenient way to diversify their portfolios without depressing the market for US dollars. However, these swaps would have to be of limited volume because they effectively transfer the risk of dollar depreciation from central banks to the IMF.

original article: Chatter about a New Global Currency Is Overblown

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

The government and banks can share in any upside.

The SEC should restore the uptick rule.

The US Treasury is already hiring experts to help buy troubled assets from financial institutions, but the most important question behind the bail-out plan remains open: what is the right price for these assets since they are not actively traded?

The government should guarantee interbank activity.

Getting Medicare costs under control is no easy job. Congress recently overrode a scheduled 11 percent cut in Medicare’s physician fees by freezing them for the rest of 2008 with a slight raise in 2009. But the program’s finances will continue to worsen as baby boomers retire. Avoiding deep cuts in physician fees from 2010 onward will require a $20 billion fix every year for the following decade. But there is a straightforward way to pay for half of this ..read more