As Lawrence noted (if you scroll down), the President’s financial reform package is before Congress. Who knows what it will look like when it emerges from the legislative process, but there is an issue that I’d like to raise now.
The focus of the proposal appears to be on the regulation of exotic financial products rather than on their existence. Maybe that is the right approach, but I wonder whether a more sweeping question should be asked. Was the financial innovation of the last two decades a good thing? There is an argument that we need a return to “bankers’ hours,” which was shorthand for the idea that financial products should be dull due to the tendency (described by Minsky) for the banking system to run off the rails.
I mention this because it may be a subtext (or actual text) of the Supreme Court’s consideration of Bilski. Since financial instruments are a significant subset of “business method patents,” I can imagine some of the briefs making the argument that these incentives for innovation were actually pretty harmful. When the Justices hear the case in the Fall, the atmospherics may not be so great for those who want a broad reading of patentable subject matter.