For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.

There's a lot of things we could do better.

China and the U.S. are the two largest importers of oil. They are the two largest emitters of carbon.

U.S. exports to China have more than quintupled since China entered the WTO and have grown more quickly than imports. In fact, China is America's fastest-growing export market.

China saves too much, produces too much, sells too much to Americans and consumes too little.

Regulation needs to catch up with innovation.

I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained.