The report from the Paulson committee on capital markets regulation hit the streets today. It'll take some time to get through all 135 page sof the report, but fortunately Columbia Business School dean Glenn Hubbard and former Goldman Sachs president John Thornton have issued an executive summary of sorts on the editorial page of the Wall Street Journal.
The gist of the thing can be found in the second to last paragraph:
Effective regulation requires economic analysis. While there are existing mechanisms at the SEC for applying cost-benefit analysis to proposed rules and regulations, we believe more can be done in this regard to assure that regulations are achieving the intended effects of investor protection at a cost that is sensible in the context of individual firms, the markets at large, and the economy as a whole. The SEC and self-regulatory organizations need to engage in a more risk-based process, focused explicitly on the economic costs and benefits of regulation (as is the case for the FSA in the United Kingdom) for companies and investors, while strengthening shareholder protections. In weighing the costs and benefits of new rules, regulators should assess and rely on empirical evidence to the extent possible.
Action Plan for Capital Markets [Wall Street Journal]