Incentives matter

As it turn out, the really risks in the system were being created not
by hedge funds but by boring old investment banks and insurance
companies. Sure there have been hedge fund failures but none on the
scale and with the repercussions of the recent failures of Bear
Stearns, Lehman Brothers, and the government sponsored mortgage
companies. Hedge funds might not have had all that many rules governing
their behavior but their incentive pay structure seems to have
regulated their risk far better.

Here is more.  On the other side of the governance fence:

The Wall Street Journal is reporting that the Federal Reserve has asked
Goldman Sachs and J.P. Morgan Chase to help make $70-$75 billion in
loans available to the AIG.

That’s a lot of money to "ask" for.