"The notion that a regulator will be able to anticipate the next crisis and correctly prescribe the proper cure flies in the face of our recent experience. ... Not a single central banker in the last episode noticed the crisis before it was already manifest. Indeed, many commentators believe it was the Fed itself that set this crisis in motion with easy credit. ... This brings us to the second problem with the scheme--the false positive. Nobody has considered the cost of a misdiagnosis by the systmatic risk regulator", my emphasis, Thomas Dempsey (TD) letter to the FT, 23 June 2009.
I agree with the WSJ. There is nothing of substance in this proposal.