03/03/2011 09:45 am ET Updated May 25, 2011

Is The New York Fed Making A Big Mistake?

An uncomfortable dissonance is beginning to develop within the Federal Reserve.

On the one hand, current and former senior officials now generally agree with the proposition that our leading banks need more capital - that is, more equity relative to what they borrow. (The argument for this has been made most forcefully by Prof. Anat Admati and her distinguished colleagues.)

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