The government and Parliament are now saying 'Financial Policy Committee, don't let this happen again'.
The Financial Policy Committee will be established to look after the general well-being of the UK financial system.
That said, there is a different set of dice that could be rolled, by the Bank of England's Financial Policy Committee (FPC).
That problem, in theory, is now being addressed, with the creation of the new Financial Policy Committee at the Bank for example.
The Financial Policy Committee (FPC) will have overall responsibility for financial regulation and monitoring the risks of the financial sector to the economy.
The BOE's Financial Policy Committee has also insisted prudential regulators forbid banks from meeting new higher regulatory capital requirements by reducing their loan books.
European Union ministers, especially French and German finance ministers, are trying to restrict the powers available to the UK's new Financial Policy Committee, which has its first meeting today.
Mr King will now chair the interest rate setting Monetary Policy Committee (MPC), the new Prudential Regulation Authority (PRA) to monitor individual banks, and the new Financial Policy Committee (FPC).
So begins and ends the speech by Andrew G Haldane, Executive Director, Financial Stability and member of the Financial Policy Committee, co-authored by Vasileios Madouros, Economist, Bank of England.
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As I said it would yesterday, the Bank of England's Financial Policy Committee (FPC) has declared that big British banks need to raise more capital as protection against possible future losses.
The Conservatives would create a Financial Regulation Division within the Bank of England and a Financial Policy Committee similar to the rate-setting Monetary Policy Committee, which would monitor systemic risks and have the power to break up banks.
They want the chancellor to legislate for a lower ratio, of perhaps 25 to 1, and to give the Bank of England's Financial Policy Committee the power to vary the ratio, depending on prevailing financial conditions.
If anything, Germany is treading less far down this path than some other countries in Britain, for example, the Bank of England will call the shots through a powerful new Financial Policy Committee, which has already started work.
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This has been compounded by the BOE's Financial Policy Committee which has demanded U.K. banks go well beyond international standards on capital and liquidity, including meeting Basel III rules in full by the end of 2013, six years early.
So, as the deputy governor of the Bank of England, Paul Tucker, told me today, one of the Financial Policy Committee's tasks will be to periodically make itself unpopular, by making it harder for any of us to obtain a mortgage.
The creation of the Financial Policy Committee, which has its first meeting on Thursday, represents arguably the most important change to the way the British economy is managed since the Bank of England was given control of interest rates in 1997.
What is more, Mr Carney will be the first governor of the Bank of England not only to have the power to set interest rates but also to directly influence the supply of credit through the newly created Financial Policy Committee.
By the end of 2012, the Financial Policy Committee expects to be endowed by Parliament with sweeping powers, to force banks to slow down the pace of lending, if such lending were seen to be leading to a bubble in the housing market, for example.
Labour's Chris Leslie warned that there might be circumstances under which the aims of the Financial Policy Committee, which primarily focuses on financial stability, clashed with those of the Monetary Policy Committee, which mainly deals with inflation-targeting, but is also obliged to take growth into account when making decisions.
None of this is trivial - not least because George Osborne's banking policies, which include putting a ring-fence around retail banks and giving the Bank of England's Financial Policy Committee the power to vary banks' capital ratios, are out of step with what most of the eurozone wants and plans.
And perhaps the new government's most significant financial reform has been an attempt to prevent this particular horse bolting again: it has set up a so-called Financial Policy Committee at the Bank of England, which will soon have formal powers to prevent banks lending too much in the next boom.
So, for example, he says that if - as now - there is evidence that banks are creating too little credit for the health of the economy, the Financial Policy Committee should perhaps have an explicit power to limit dividend payments by banks, so that the banks retain more capital to underpin lending.
It's in effect a demand for the new macro-prudential regulator being created by the Treasury which will sit within the Bank of England - the Financial Policy Committee, of which Lord Turner is a member - to have important and unprecedented new powers to determine credit creation by banks and to determine the distribution of credit.
The issue, which is a little bit more substantial, is whether all this diligent chivvying by Mr Bailey will be deemed by the Bank of England's Financial Policy Committee to be adequately filling the hole in bank's balance sheets - a hole described by Sir Mervyn King in late November as "material" (see my previous pieces here and here).
Now the reason Morgan Stanley has been taking a keen interest in all of this is because of the noises coming out of the Financial Policy Committee - the new macro regulatory arm of the Bank of England currently working in an informal capacity but soon to have statutory powers - that the capital banks hold against mortgages is too low.
However within a matter of days, Sir Mervyn and his colleagues on the Bank of England's Financial Policy Committee, or FPC, will determine how much additional capital all Britain's banks have to find, to protect themselves against future losses on loans to business and to personal customers who are only just keeping their heads above water (and see one I prepared earlier).
The Bank's Financial Policy Committee (FPC) has concluded that they collectively need to raise more than the sums they have individually negotiated with the soon-to-be-closed Financial Services Authority (they have recently been agreeing measures with Andrew Bailey of the FSA to strengthen themselves - which is why, for example, Royal Bank of Scotland is shrinking its investment bank and floating off its US bank, Citizens).
Paul Tucker, Deputy Governor, Financial Stability, and Monetary Policy Committee members Professor David Miles, and Ian McCafferty, speak more freely about the controversial policy of quantative easing (QE) which is being deployed to combat the recession?
Wednesday, Bernanke heads back to Capitol Hill, where he'll give his mandatory, semi-annual report on monetary policy to the House Financial Services Committee.
On August 2, at the invitation of chairman Ron Paul, I spoke on a panel before the House Committee on Financial Services, Subcommittee on Domestic Monetary Policy.
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