Professor William Black:

The Chairman said that everyone should take off one's jersey. I never had a jersey; I am not from here. Structure matters. Creating conflicts of interest is a bad idea, but all of these structures failed. I spend less time worrying about if it is an FSA consolidated approach or is it from the Central Bank or not from the Central Bank, and far more about whether the people in charge understand the concept. As Professor George Akerlof, the Nobel laureate in economics, said, not understanding the concept, they were helpless to deal with it. If you do not understand the concept, what can you do? It will happen again and you will never even see it.

I focus on leadership. How did it work in the savings and loan crisis? It worked because the chairman of the agency listened to the people in the field, who in business school terms are the closest to the facts. Each month he got 1,000 pages. He actually read and he said that the people in the field were right, and then he went out and he hired the two people in America who had the reputation for being the toughest regulators in America and put them in charge of our two worst areas.