PETER WALLISON: Tim Geithner Remains Stuck in 2008.

What most people have come to recognize since the crisis is that the Fed and other bank regulators had strong oversight responsibilities for the banking system, but banks-Citi, Wachovia, Washington Mutual and IndyMac-got into just as much trouble as the supposedly “unsupervised” investment banks. So tell us again, Mr. Secretary, why it makes sense to designate nonbank firms-insurers, securities firms, holding companies, finance companies, hedge funds and others-that will be regulated and supervised by the Fed? How can it be a good idea to declare, in effect, that these firms are too big to fail, and why would anyone think the Fed will be able to improve on its bank regulatory record when it is supervising nonbanks?

The failure of the regulators in the financial crisis has gotten insufficient attention.