The result, predictably, was the second, third, and fourth largest bank failures in US History under his administration. Besides undermining safety and soundness, Regulation by reflex has driven excessive regulation that can lead to economic stagnation. and economic stagnation is itself a threat to financial stability. In calibrating regulations, federal agencies must avoid the temptation to create a zero risk financial system which would result in what others have called the stability of the graveyard. (06:57–07:04)
CLAIM
Asserts that reactive regulation contributes to economic stagnation.
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