Do the Fed and other financial regulators have the tools they need to avert future financial crises?
I think it’s pretty clear that the old banker’s rule – which often bankers forget, which is “know your customer” – certainly applies to the Federal Reserve. If we’re going to lend money to people, we’re going to know everything about them. We’re doing a lot of work under the leadership of the New York Fed and the Board of Governors on credit default swaps. I think it’s very important that we have regulated markets again without killing risk-taking. At least knowing what the risks are, where they are, who does it, what is the aggregate risk that’s being assumed, whether it threatens the financial system or not. What’s the outlook for Texas banks? Our banks are in much healthier shape than banks elsewhere in the country. More conservative. I go around the state and I meet with bankers constantly. They’re my constituency. I can’t say it’s like looking in Putin’s eyes and seeing his soul. You never know what’s out there. But they’re pretty hardheaded people. Are there inflation risks from
