So what is the role that credit default swaps can play in an economy? Well my feeling is that if these things actually will now be traded on either exchanges or some kind of central clearing, they are going to be a very good measure of the credit worthiness of different companies.

We're talking about should we increase taxes? Why not put a tax on carbon emissions. It would raise a lot of money, it would reduce the environmental damages in the future, it would solve so many problems, and it would be a much more constructive thing to do than to think about raising the income tax.

A lot of ambitious code has been written into the law for those and we will have to see if it actually works, if we have another example of a big financial institution going bankrupt.

If you have information that a company is not as good as its stock market valuation, you don't have a way to sell that stock unless you already own it. And so that information doesn't get incorporated in the company's stock price as fast if you don't allow short selling.

I think global coordination is tremendously important. I hope we can see this happening through the G20 and through coordination of regulatory regimes around the world. I guess those are the main features of this bill that are important.

There are a lot of ways that investment banking models work, but these risks are not internalized by the people that are taking them.

I think we're fooling ourselves if we think that regulators are going to be able to outsmart the bankers. So, the task of designing regulatory reform is trying to make more or less foolproof regulation and that's one of the advantages of the systemic category.