Rather than preempting crises, regulators have frequently reacted to them after the fact. They played the role of hazmat cleanup team instead of preventing dangerous spillovers in the first place. Regulation by reflex has led to a regulatory myopia that has undermined safety and soundness. Under President Biden, the bank regulators preoccupied themselves with reputation risk, now discredited climate related financial risk and other risk with no clear nexus to safety and soundness. (06:16–06:24)
CLAIM
Asserts that reactive regulation has negatively impacted financial safety and soundness.
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