The Obama Administration should take swift action in order to address regulatory issues like the front-loaded compensation structure, Robert Kuttner of the Economic Policy Institute and co-editor of the American Prospect said Thursday.

Speaking at the Federal Reserve Bank of Chicago's 45th annual Conference on Bank Structure and Competition in Chicago, Kuttner stressed that immediate action must be taken to restore the health of the banking industry.

He questioned the assumption that time is on the government's side in the midst of this banking crisis. That assumption is not true, he said, and the longer it takes to get the banking industry back to health the greater the risk of a longer stagnation, possibly on the scale of the Great Depression.

Kuttner referenced the debate over the best way to resolve institutions facing bankruptcy. He noted that the lack of an optimal resolution policy affects the debate about the future of systemic regulation.

I think any institution that creates credit and creates risk ought to be subject to regulation, Kuttner said.