Regulators must be able to make certain that financial institutions have enough capital to weather crises

Regulators must be able to make certain that financial institutions have enough capital to weather crises Mr. Summers laid out five principles for the plan: The government must have the authority to take over and liquidate failing nonbanking financial institutions. Regulated entities must not be able to choose their regulators, nor should regulators have to fight each other for jurisdiction. And the interests of consumers must trump the interests of regulated companies. But IMF chief Dominique Strauss-Kahn and U Finance ministers from the Group of Eight leading industrialized countries Saturday said they had started to discuss how to scale back the massive amounts of stimulus they have injected into their economies. Less than a month before a meeting of G8 world leaders in L’Aquila, Italy, top finance officials said they had asked the International Monetary Fund to help them map out the best strategy for cutting budget deficits, withdrawing support from banks, and tightening monetary policy. S. Treasury Secretary Timothy Geithner both stressed the need to ensure a recovery had taken hold before pulling back on global efforts to lift the economy. “We discussed the need to prepare appropriate strategies for unwinding the extraordinary policy measures taken to respond to the crisis once the recovery is assured,” the finance ministers said in a statement at the end of their two-day meeting. The result is an increase in government debt unprecedented in peacetime. Without a plan to scale back their debts, governments fear yields on their bonds may rise significantly, increasing the cost of borrowing for the public and private sectors and threatening to undermine any recovery. G8 finance ministers...