Comments on: Financial regulation: The alphabet soup gets much worse http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Ethan Farber http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2892 Thu, 18 Jun 2009 12:18:42 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2892 “Why perpetuate these distinctions between federally-chartered banks, state-chartered banks, and credit unions? I have no idea.”There was this thing called the S&L crisis about 20 years ago. Go read up on it. Since then, there has been a distinction between these organizations.”Treasury has decided that no financial institution can be allowed to engage in any nonbanking activities at all — basically there’s no way that Walmart, for instance, or Safeway, will ever get a banking license. That’s bad for consumers.”GM persisted as long as it did and did not correct its underlying difficulties because its banking arm supported its crumbling industrial arm. If this was not the case, the problems with the latter would have been worked out before they became systemic. Having powerful retailers and employers also have power of banker over citizens opens the way to corporate dictatorship. It has happened before, and that was why reforms were undertaken in the first half of the 20th century.”In other words, if you thought the bureaucracy was bad until now, just wait until you see what’s coming down the pike.”Regulation did not lead us down this path to ruin – absence of regulation did. It is because these organizations cannot regulate themselves bureaucracy has been put in place to do it for them. This has been the case after each and every systemic failure for centuries and nations are without exception the better for it, from John Law to the world of Sinclair to FDR to today.

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By: Zak http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2886 Thu, 18 Jun 2009 02:31:25 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2886 If the raft of new financial sector regulation is put together it is woefully inadequate to stop another financial melt down.Now let the senate and the lobbyists pull it apart and it will not be worth the paper it is written on!!!After another couple of these boom and bust cycles the US will effectively isolated itself from the world economy because nobody will want to deal with it except China and Russia “their main creditors”. The rest of the world will see the US’s poor regulatory system as to much of a risk and will shun it and justifiably so. It will take time for this to occur but unless change its embraced the out come will in the long term be sustain instability where the few benefit mightily and most of the US citizens suffer under increased tax burdens to pay for what is essentially wanton greed.Hmmmm all sounds every familiar!

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By: Eric Dewey http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2874 Wed, 17 Jun 2009 17:58:56 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2874 the reason why the regulators are so dead-set against banks engaging in non-bank activities is because they don’t want non-bank parent companies to be taking money out of their regulated bank subsidiary. there have been some instances of that already (Spiegel was doing it in the 90’s to the bank I worked at).Keep in mind that their legal authority over a non-bank parent is not as clear as the MSM or blogging community might think…

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By: Jeffrey Wernick http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2873 Wed, 17 Jun 2009 17:51:21 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2873 whenever you get regulators pricing risk, which is what Basel essentially does, the market will always to to arbitrage it if the price is wrong. That is what arbitrageurs do and what is expected of profit-maximizing entities. The problems of banks, like all other heavily regulated, network industries; is that financial disclosures are obscure and the regulatory audits are undisclosed. There should be a greater push towards transparency and disclosure. Not more obscure regulation which will hamper innovation and potentially increase the cost of capital to finance, which, as a consequence, will increase the cost of capital to all. And we need a credible, transparent bankruptcy procedure for all financial institutions.

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By: PS http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2871 Wed, 17 Jun 2009 17:24:37 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2871 Why on earth is it bad for consumers not to be able to bank at Walmart or Safeway? That’s a minor inconvenience at worst. It sounds more like it’s bad for financial-sector executives — which is very good for consumers, and good for the nation as a whole.

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By: joann swanson http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2868 Wed, 17 Jun 2009 16:55:43 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2868 Did it say what the new Office of National Insurance is for? What will they be regulating?

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By: franko http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2863 Wed, 17 Jun 2009 15:18:27 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2863 i swear your decoding of the 85page doc reminded me of pentagon analysts (or TIME Magazine columnists) decoding Kremlin utterances back in 1977 – has it really come to this?will nobody state that the emperor has no clothes?carry on

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By: The Beav http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2860 Wed, 17 Jun 2009 14:45:57 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2860 Good job of framing this in a way that illustrates the impossibility of the concept. Now, staff all of it with left-over Reaganistas who know their collective job is to do nothing or incoming corporation-haters who know their job is to impede, blame and hold endless meetings. Nothing much will happen, but what does happen will be counter-productive. I voted for Obama (rather, against McCain/Palin) but I don’t think he gets it.

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By: purplepatriot http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2859 Wed, 17 Jun 2009 14:32:31 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2859 This column is a rather sarcastic over simplification of the administration’s proposals. McClatchy News has a more succinct explanation. It all sounds reasonable given the complexity of the situation and the number of players. Now we’ll have to wait to see what congress does with it.

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By: Bob W http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/comment-page-1/#comment-2857 Wed, 17 Jun 2009 14:23:21 +0000 http://blogs.reuters.com/felix-salmon/2009/06/17/financial-regulation-the-alphabet-soup-gets-much-worse/#comment-2857 According to the Washington Post, the new CFPA “… would have a mandate to increase the availability of financial products in lower-income and underserved communities, in part by enforcing the Community Reinvestment Act, which requires banks to make loans everywhere that they collect deposits.”Are you kidding me?!?!? This is what started the sub-prime mess in the first place!! What are they trying to do—start it all over again?!???

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