When crisis hits, the first thing legislators want to do is enact new laws that will keep whatever happened from happening again. That's what Congress did with Sarbanes-Oxley after Enron and Worldcom collapsed, and that's what observers have said will happen when the new Congress comes in. Regulation in the banking and mortgage industries will be stiffer and more complicated to discourage the behavior that led to the current economic downturn.
It's true that new and different regulations may be necessary. But the one thing legislators shouldn't do is overregulate, according to an article in The Australian. Otherwise, they run the risk of imposing unintended consequences on "innocent" parties. Thanks to Sarbanes-Oxley, everyone knows what that can do, the writer says, and they need to guard against it now.
The one thing legislators should be concerned about, warns The Australian, is "the wave of international money that can buy and sell what it wants, almost anywhere, in moments. It's a mixture of hedge funds, sovereign wealth funds and a raft of international pension money."