Not to draw from the same well too often, but whenever a banking issue hits, Toolbox can find no better reserve of poignancy than It's a Wonderful Life. And while Frank Capra may not have meant for the character of crusty, mean, old Mr. Potter to be quoted with any sort of approval, given what's happened in the U.S. banking system, particularly as it relates to sloppy lending decisions, well, here goes. (And, in any event, from a 2008 perspective, Mr. Potter was a great comic turn.)

Not to draw from the same well too often, but whenever a banking issue hits, Toolbox can find no better reserve of poignancy than It's a Wonderful Life. And while Frank Capra may not have meant for the character of crusty, mean, old Mr. Potter to be quoted with any sort of approval, given what's happened in the U.S. banking system, particularly as it relates to sloppy lending decisions, well, here goes. (And, in any event, from a 2008 perspective, Mr. Potter was a great comic turn.) Upon the death of George Bailey's father, Peter, Mr. Potter explains why he believes the Bailey Building & Loan should be dissolved:

"Peter Bailey was not a business man. That's what killed him. Oh, I don't mean any disrespect to him... He was a man of high ideals, so-called, but ideals without common sense can ruin this town ***. Now, you take this loan to Ernie Bishop..., you know, that fellow that sits around all day on his brains in his taxi. You know... I happen to know the bank turned down this loan, but he comes here and we're building him a house worth five thousand dollars. Why?"

And that's figuratively what many have been asking about the oversight that led us down the path to the subprime debacle, which has exposed the weaknesses in the foundation of our financial system. Of course, the question is, as always, what's to be done?

While retooling for the road ahead will undoubtedly take time, the powers that be have begun the process, and that process is chronicled in The Department of the Treasury Blueprint for a Modernized Financial Structure, by Norman D. Slonaker (Sidley Austin LLP). The outline highlights the relevant statutory basis of the current regulatory system, but is more focused on the March 31, 2008 "blueprint" released by the Department of the Treasury that contains "short-term, intermediate-term and long-term recommendations" for improving that regulatory system, recommendations that are premised on the concept of "'optimal regulatory framework' rather than the current function-based system." Slonaker points out the drivers of Treasury's proposal, the recommendations themselves and the changes it will require in the federal bureaucracy. Say what you will about Mr. Potter, but this is a proposal he could probably get behind.