With the recent publication of its final rule, the federal government's Financial Stability Oversight Council is now in position to designate certain nonbank firms as "systemically important financial institutions" (SIFIs). There is probably no aspect of the Dodd-Frank Act that will have more damaging effects on competition in the U.S. financial system.

The Obama administration's proposal for a resolution authority for nonbank financial firms has a fundamental flaw.

Under the Dodd-Frank financial-reform law, large nonbank firms may be declared systemically important because their failure will cause a systemic breakdown. In effect, this amounts to a government statement that these firms are too big to fail.

Secretary Geithner argued that we have forgotten the reasons that the Dodd-Frank Act was necessary, and that's why the act has become so controversial. What the secretary seems to have missed is that we have learned a lot in the intervening years. The administration's rush to judgment on the financial crisis is a case study in why it would have been worthwhile to wait for the facts.

The underlying idea—that financial institutions are "interconnected" and the failure of one will drag down others - is not implausible. But like so much else that underlies the Dodd-Frank Act, it was accepted as true—and acted upon—without much evidence, or even much thought.

Identifying firms as too big to fail is a mad policy: It will signal to the world that the government will take steps to prevent the failure of these firms, giving them advantages in the marketplace.

Panelists will address questions regarding Treasury Secretary Timothy Geithner's recently proposed two-part plan for addressing systemic risk.

Many predict calamity for the housing market without government mortgage guarantees, but Federal Reserve data tell a different story. The data should have a profound effect on the question of whether to replace Fannie and Freddie with another government-backed system.