“Proponents of the status quo in the financial sector just cannot catch a break. Early August is supposed to be a time when regulators and markets slow down, or perhaps even take a vacation. But this year news of mismanagement or worse continues to emerge from complex financial institutions.

It’s time for a new approach to bank capital. A proposal by two United States senators is not a panacea, but it would have a significant effect on big banks and how they operate.”

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” The financial sector should take up this issue because megabank behavior has become so bad that it damages everyone’s business. Investor confidence has taken a beating precisely because highly leveraged financial institutions get into so much trouble. As Dennis Kelleher of Better Markets put it on his blog: It’s not the fundamentals or computer trading or Wall Street misconduct or one scandal after another. It is the fundamentals and computer trading and Wall Street scandals and lots more. “

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Read Simon Johnson’s full New York Times story here.