--- title: "Meaning & Key Takeaway of: Our goal should be to make decision…" description: "\"“Our goal should be to make decision makers internalize the full consequences of their decisions, rather than prevent them from making decisions altoge..." image: "https://sms4smile.com/quotes/i/21e/raghuram-rajan-10594_fault-lines_our-goal-should-be-to-make-decision-make_874696.jpg" --- # Our goal should be to make decision makers internalize the… ![“Our goal should be to make decision makers internalize the full consequences of their decisions, rather than prevent them from making decisions altogether [...] But we tend to reform under the delusion that the regulated institutions and the markets they operate in are static and passive, and that…” quote by Raghuram Rajan](https://sms4smile.com/quotes/i/21e/raghuram-rajan-10594_fault-lines_our-goal-should-be-to-make-decision-make_874696.jpg) [Download](https://sms4smile.com/quotes/i/21e/raghuram-rajan-10594_fault-lines_our-goal-should-be-to-make-decision-make_874696.jpg) [Open image](https://sms4smile.com/quotes/i/21e/raghuram-rajan-10594_fault-lines_our-goal-should-be-to-make-decision-make_874696.jpg) > ““Our goal should be to make decision makers internalize the full consequences of their decisions, rather than prevent them from making decisions altogether \[...\] But we tend to reform under the delusion that the regulated institutions and the markets they operate in are static and passive, and that the regulatory environment will not vary with the cycle. Ironically, faith in draconian regulation is strongest at the bottom of the cycle, when there is little need for participants to be regulated. By contrast, the misconception that markets will govern themselves is most widespread at the top of the cycle, at the point of maximum danger to the system. We need to acknowledge these differences and enact cycle-proof regulation, for a regulation set against the cycle will not stand. To have a better chance of creating stability throughout the cycle--of being cycle-proof--new regulations should be comprehensive, nondiscretionary, contingent, and cost-effective.”” [Raghuram Rajan](https://sms4smile.com/quotes/author/raghuram-rajan/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Regulators must design rules that work across economic cycles, not just in static conditions. **In simple terms:** Create rules that stay effective in all market phases. Key Takeaway Design cycle‑proof, comprehensive regulation. Themes regulation financial stability market cycles policy design Mood analytical concerned Type policy economic When to use this quote - central banking - policy making - risk assessment - legislative drafting Key Concepts systemic risk discretionary vs nondiscretionary contingent regulation Questions to Reflect On - How can regulators balance flexibility with consistency? - What mechanisms ensure rules adapt to cycles? A Different Perspective Static rules fail when markets change; enforcement can be costly. ★ ★ ★ ★ ★ No ratings yet [Draconian Regulation](https://sms4smile.com/quotes/about/draconian-regulation-988309/) [Fault-lines](https://sms4smile.com/quotes/about/fault-lines-62153/) [Goals](https://sms4smile.com/quotes/about/goals/) [Making decision](https://sms4smile.com/quotes/about/making-decision/) [Making decisions](https://sms4smile.com/quotes/about/making-decisions/) [Markets Govern](https://sms4smile.com/quotes/about/markets-govern-988310/) [Passive Regulatory](https://sms4smile.com/quotes/about/passive-regulatory-988313/) [Proof Regulation](https://sms4smile.com/quotes/about/proof-regulation-988312/) [Regulated Institutions](https://sms4smile.com/quotes/about/regulated-institutions-988311/) ## Related quotes > [The thought for a long time was that banks needed to be too controlled, too regulated to be turned over to the Wild West…](https://sms4smile.com/quotes/sarah-lacy/the-thought-for-a-long-time-was-that-banks-needed-to-be-too/) [Sarah Lacy](https://sms4smile.com/quotes/author/sarah-lacy/) > [“Comes the tipping point in life, when we decide to a ‘stop and search’ and our emotional police bring us to a standstill. 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