ABSTRACT
In connection with a discussion of Hy Minsky's proposals for new bank examination procedure, first formulated in the 1960s, J. A. Kregel describes Minsky's broader contribution as articulating a framework for "dynamic macroprudential regulation." Financial regulation and examination procedures need to be constantly reassessed in order to avoid becoming obsolete. And in that sense, as Minsky recognized, "the quest to get money and finance right may be a never ending struggle." The only basis for regulation would be to concentrate on the eradication of the disruptive behavior of bad actors or mismanaged financial institutions. But Minsky's "new" approach to examination was not only to recognize the cyclical nature of the interactions generated by financing relations within the economic system, but also to take a much broader approach to regulation that might be called "dynamic" macroprudential regulation. Deposit insurance, as insurance, was outmoded and inefficient means of systemic macroprudential regulation in the presence of systemic instability and of banks being too big to fail.
