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Regulation creates a moral hazard.

There are some risks we choose to take because the benefits from taking them exceed the possible costs. Optimal behavior takes risks that are worthwhile. This is the central paradigm of finance: we must take risks to achieve rewards, but not all risks are equally rewarded.

Market discipline can only limit moral hazard to the extent that debt and equity holders believe that, in the event of distress, they will bear costs.

I don't want to drive the markets crazy. I don't want to create trouble, but rather order and rules and norms. We have to struggle against financial excesses, those who speculate with sovereign debt, those who develop financial products which have done so much harm.

The unique danger today is the possibility that we may face longer-term stagnation as a consequence of relying too heavily on borrowed money.

Banking is a very treacherous business because you don't realize it is risky until it is too late. It is like calm waters that deliver huge storms.

Financial crises are an unfortunate but necessary consequence of modern capitalism.

The second thing we did was said, OK, we've now identified the risk, but what do you want to do with the money? Because it's not enough to have risk; you've got to have a meaningful use for the money we give you.

We should ban banks from risk-taking because society is going to pay the price.

I believe that we have to have a new regulatory regime for our financial system.