Regulation and the "housing bubble" (Financial Crisis Inquiry Commission):
The Federal Reserve was the one entity empowered to do so and it did not. The record of our examination is replete with evidence of other failures: financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective; firms depended on tens of billions of dollars of borrowing that had to be renewed each and every night, secured by subprime mortgage securities; and major firms and investors blindly relied on credit rating agencies as their arbiters of risk. What else could one expect on a highway where there were neither speed limits nor neatly painted lines?
We conclude widespread failures in financial regulation and supervision proved devastating to the stability of the nation’s financial markets. The sentries were not at their posts, in no small part due to the widely accepted faith in the selfcorrecting nature of the markets and the ability of financial institutions to effectively police themselves. More than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor.
http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_conclusions.pdf
Transparency:
In early 2012 the Federal Open Market Committee made known a decision to further increase the transparency of its monetary policy decisions.1) It announced a plan to publish the predictions of members of the Board of Governors and Reserve Bank presidents of the level of short term interest rates as well as having them describe their views of the evolution of the Fed’s investment portfolio. The Fed already published their forecasts of inflation, unemployment and growth. In taking this additional step it was following the central banks of New Zealand, Norway and, Sweden, which have been publishing interest rate forecasts for years. More broadly, this decision to release interest rate forecasts and portfolio outlooks was another step in the trend toward greater central bank transparency that has not been limited to this small handful of countries but has been underway globally for some years now.