Regulators talking about financial bubbles get it all wrong, usually scapegoating Wall Street.
Then you get political solutions. More regulation, to see to it that the regulators catch the next bubble before it starts.
It cannot be done, except in political circle imagination. Bubbles are hard to recognize in advance. That’s only easy in retrospect.
Example: The residential housing bubble. Then, Congress went out of its way to actually exacerbate a future problem.
There was legislation introduced years ago to minimize Fannie Mae and Freddie Mac leverage. That would have reduced the fuel that fed the fire under the housing financial bubble. And it was turned down by politicians who did not want to squelch the boom that gave lower classes an opportunity to own homes they could not afford. ( See the Earl J Weinreb NewsHole® comments.)
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