Mel Watt, Director of the Federal Housing Finance Agency, recently announced that he will reduce the minimum mortgage down payment requirement for Fannie Mae and Freddie Mac – the housing financing behemoths that he controls as their conservator since the financial crisis – to three percent.

Is there hope for reform? Perhaps not, at least until we recognize a major source of the world's government debt. When economists and politicians talk about the problem of unsustainable government debt, they often focus on the need to rein in government budgets and entitlement policies. 

Fragile by Design is a revealing exploration of the ways that politics inevitably intrudes into bank regulation.