It seems to be just a reorganisation thing - streamlining agencies and even reducing regulation:
'...Many of the proposals, like those that would consolidate regulatory agencies, have nothing to do with the turmoil in financial markets. And some of the proposals could actually reduce regulation.
According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.
While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation...'
This columnist is scathing:
'Anyone who has worked in a large organization — or, for that matter, reads the comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom...
...Traditional, deposit-taking banks have been regulated since the 1930s, because the experience of the Great Depression showed how bank failures can threaten the whole economy. Supposedly, however, “non-depository” institutions like Bear didn’t have to be regulated, because “market discipline” would ensure that they were run responsibly.
When push came to shove, however, the Federal Reserve didn’t dare let market discipline run its course. Instead, it rushed to Bear’s rescue, risking billions of taxpayer dollars, because it feared that the collapse of a major financial institution would endanger the financial system as a whole.
And if financial players like Bear are going to receive the kind of rescue previously limited to deposit-taking banks, the implication seems obvious: they should be regulated like banks, too...'The Dilbert Strategy
I stopped reading your article when I saw the use of "swat teams" by accountants.
Give me a break. (How many different ways can liberals use fear mongering to terrify us of "Big Brother" and his evil minions?)
Okay, I know that the writer is not serious, but it's obvious from the first paragraph that the entire article is charged (a very common occurance with the Cenile Old Lady).
Look at it from a different point of view. Every week, financial geniuses create new derivitives and new derivitive markets. As a result, corporation standards and accounting standards must create new rules for accounting for them and maintaining investor security.
The SEC and FASB already have broad enough authority to investigate all means of investing no matter how the game changes. They are mandated the responsibility and the SEC is sometimes ruthless.
So you can look at it two ways: either we have no need of further regulatory powers (and you're hoping that the SEC can keep up with the times), or you can say that we are perpetually in need of ever broadening regulatory powers (which is true).
The problem in the lending markets is exactly that--the bundling of risky loans and trading them on a open market for bundled loans (most people don't know that such a market exists, but it's been around at least 15 or 20 years).
However, the credit "crisis" in the US has been way overblown. 99.2% of all home loans are being paid, 98% are being paid on time. This is tiny especially in light of the fact that this is only a very small sector of the overall economy.
The reason for house prices plummeting as they are now is not because of the credit crisis, it's because home prices over the last 8 years became severely inflated. All inflated investments fall precipitously. It's a fact of life.
Posts: 94 | Location: United States | Registered: 06-01-08
