Two stories on the reform of financial markets and the shape that reform should take

• Pope Benedict XVI has called for greater regulation of financial markets, as this article over at Forbes.com points out:  Even the Pope Believes We Need Stronger Financial Regulation and Reform. While not a de fide teaching of the Roman pontiff, the Pope's statement is a good reminder that Catholic social teaching holds a positive role for government. Catholicism is not libertarian -- but neither is it Statist. As with most things, the path of virtue is the path of the golden mean. Too much government is stifling and oppressive. Too little government is chaotic.  The Pope helps all of us to remember this truth. 

• How do we keep that golden mean when dealing with government reform of the financial sector?  Professor Stephen Bainbridge -- a conservative, Catholic, corporate law professor -- provides an answer over at his self-named blog: Fixing the Big Banks. The kind of fixes that would work best don't require an attack on the free market -- in fact, they would strengthen the free market considerably while reducing the overall regulatory load on the financial sector by implementing just two simple principles:  disclosure and consequences for non-compliance. A good reminder that a positive role for government doesn't require big, intrusive bureaucracy.