Thursday, March 22, 2007

A governor of the US Fed on regulation

With economists like this, who needs deputy ministers? From the 7th ed. of Frederic Mishkin's The Economics of Money, Banking and Financial Markets, chapter 10, pg. 237:

Government regulation leads to financial innovation by creating incentives for firms to skirt regulations that restrict their ability to earn profits.
Well, if that's what it takes to stimulate innovation, then bring 'em on! Regulate now, innovate later.