What should be done about trading in complex derivatives?
The explosive growth of complex and nontransparent securities created a time bomb that has now blown up. Outlawing these kinds of securities, even if possible, would be far less preferable than making them easier to understand, standardizing their form and mandating their registration on a regulated exchange. The path from here to there will require a thoughtful but highly technically feasible road map that does not yet exist. How should demand deposits in commercial banks, or money-market funds, be insured? In the heat of the crisis, different countries are taking different approaches. Washington has stepped in and guaranteed money-market mutual finds without limit, and banking deposits up to $250,000. Aside from the potential for sucking money out of banks, the U.S. approach is different from the one that Ireland, Greece and Germany have just instituted, in which all bank deposits are insured. Eventually, common standards would be better. There are many other global issues that need
