A clearing house for all derivatives would create transparency, increase liquidity, and let derivatives trade in a market place, much the same way as bonds, stocks and options already trade.
By derivatives, I mean credit default swaps( of which an estimated $40 – $60 trillion exists ), currency swaps, embedded derivatives, interest rate swaps and all other derivatives.
Revised accounting rules that set the guidelines for off-balance sheet items is another action that is late in coming. (Citibank has approximately 1.2 trillion in off balance sheet items.) These rules need to address what can be included, how they are accounted for, and how they interact with the rest of the firm's capitalization.
The second thought of the day would establish a national set of requirements for all prospective home-buyers.
A minimum percentage as a down-payment, a verifiable means of payment, and interest rate guidelines are basic to a sound housing market.
These guidelines will protect the system and the home-buyer, as well as prevent lending abuses and at the same time create responsible home-buyers.