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Protect investors and banks by using their ratings in your rules for capital adequacy and investment.
But what will actually be in those "strict rules" for capital, liquidity, and so on?
Here, regulators play an important oversight role, by setting the rules for capital relief transactions and by determining whether specific transactions meet appropriate standards.
Why not change the rules for capital markets to encourage longer-term investment, making it possible to reward longer-term investors with extra voting rights?
The Dodd bill tries to fill this gaping hole in the system by letting federal regulators impose "strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity".
They also allow investors to carry back theft-losses for three years — one more year than under the rules for capital losses — and to carry losses forward for 20 years.
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They talk a good game about the importance of freedom: but it's one rule for capital and another for people.
Pindyck is the co-author of Investment Under Uncertainty (Princeton University Press, 1994), which demonstrates that the traditional "net present value" rule for capital investment decisions can lead to wrong answers since it ignores the irreversibility of most investment decisions and the option of delaying an investment.
How much sway would Britain possess when the euro zone decides on a rule for capital markets, for instance?
FOR the past five years, the world's financial regulators have been working on a new set of rules for bank capital, called Basel 2. The idea is to ensure that banks' capital matches the risks they carry: the riskier their loan books, the more capital they should hold.
Although he supplies no rules for forming capital letters, he does give two or three versions for most bastarde capitals, and he demonstrates some freedom in their creation.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com