Hard as it is to defend the Byzantine nature of U.S. bank supervision, it's at least as hard to find a model guaranteed to provide a better defense against financial crises.
None of the four major approaches to supervisory structure seen in the rest of the developed world proved uniformly impervious to the latest boom-bust cycle. For example, the U.K. experience raised serious questions about the wisdom of the so-called integrated model, in which regulatory powers are consolidated into a single agency keeping tabs on all kinds of financial firms. A more "functional" approach, with separate regulators specializing in different aspects of finance, did not protect Spain from a real estate bubble severe enough to rival our own.
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