John C. Coffee: “The tide has gone out on Wall Street, and we are now increasingly finding 'who has been swimming naked.'”

First, we must address the problem of financial institutions that are deemed too big--or perhaps too interconnected--to fail.

I want to commend Congressman Himes for having supervised the drafting of a careful, balanced, and sophisticated bill.

I want to be clear that I think there could be a robust bankruptcy provision that would be helpful and that would be a supplement, but it can't be a substitute.

Second, we must strengthen what I will call the financial infrastructure--the systems, rules, and conventions that govern trading, payment, clearing, and settlement in financial markets--to ensure that it will perform well under stress.