Stephen Matteo Miller

Every time we revise bank capital rules, we uncover new flaws that leave banks unprepared for unexpected stress events.

While much of the debate of the past decade has focused on the Dodd-Frank Act, changes to Basel capital standards have played a big role in adding to the regulatory burden.

Rather than just avoiding costly rules, cost-benefit analyses can also validate worthy ones. That is the case with proposals to toughen the leverage ratio.

The legislation to reform the Dodd-Frank Act promotes the idea that the best defense against another crisis is simpler, higher capital requirements, not prescriptive regulations.

Endorsements from lawmakers such as Bernie Sanders and Elizabeth Warren of the U.S. Postal Service providing banking services overlook how a similar plan faltered after the Panic of 1907.