Ignore monetary policy at your peril

In an effort to determine what went wrong and enshrine "never again" as their motto, central bankers are focusing on what they did, or didn't do, in their role as regulators to aid and abet the financial crisis.

The Federal Reserve, for example, in its capacity as a bank supervisor, plans to get involved in the compensation of bank employees, from chief executive down to loan officer.

It's not as if policymakers presume to know the right pay scale for the third assistant VP in charge of lending to small- and medium-sized companies. It's that they want to make sure incentives don't encourage excessive risk-taking in pursuit of short-term profits.