The bank regulators caused the current banking crisis by allowing banks to keep a portion of their sovereign debt (read US Treasuries) on their balance sheets at cost. They didn’t have to mark them to the market price as the fed raised interest rates. It is no surprise that banks are now failing. I’m reminded of the “Liar Loans” that another Federal agency allowed that were a big contributor to the housing collapse that great recession. We need to go back to the Federal Reserve being responsible only for attempting to control inflation.
It is time to read some more Nassim Taleb especially Antifragile.