Ben Bernanke made his name as an authority on The Great Depression. Dick Fuld ran the bank whose collapse triggered a financial crisis that could have led to another. Bernanke, by then chairman of the US Federal Reserve, called on lessons of the past in staving it off with a taxpayer bailout. Now they have come together, under oath, before a congressional inquiry into what happened. But even then they remained poles apart. Fuld said he could not understand why the Fed allowed Lehman to fail while it saved other institutions, and denied the bank had a huge capital hole. Bernanke said it would have been against the law to bail out Lehman because it did not have the collateral to protect taxpayers from the risk of massive losses. The findings of a court-appointed bankruptcy examiner support Bernanke's view. They could not get much further apart than that. It is not clear from Fuld's evidence whether he thought the legal constraints on Bernanke mattered any less than the prudence usually expected of a banker. It is clear, though, that what he lacked in collateral he more than made up for with expectations of access to a credit line from taxpayers. No wonder people worry about moral hazard, or reckless risk-taking encouraged by the expectation of not having to bear the consequences. Reforms of the capitalist financial system are supposed to contain systemic risk arising from such activities, without stifling the flow of credit. A lot will depend on regulators on both sides of the Atlantic defending the need for such reforms and then enforcing them. That is a delicate balancing act, reflected in evidence before the inquiry panel that banks, particularly in Europe, are resisting new capital requirements before global economic recovery is more advanced because they might constrain lending and choke growth. At the same time, European regulators have followed the US by dropping a plan to force non-financial firms to use clearing houses to trade over-the-counter derivatives, which would enhance transparency and regulators' ability to spot potential trouble.