Comments on: Where bank regulation is headed http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/ A slice of lime in the soda Thu, 23 May 2013 15:36:00 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: Don the libertarian Democrat http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/comment-page-1/#comment-6583 Don the libertarian Democrat Thu, 10 Sep 2009 01:06:35 +0000 http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/#comment-6583 This is from Arnold Kling on EconLog on February 9th: "Taleb, like me, wants to get rid of risk-taking by banks, and leave non-insured institutions free to take whatever risks they want, as long as they are not creating risks for others. His solution is to nationalize banks. (me: why would this mean that they would not take risks? Suppose that Freddie Mac and Fannie Mae had been fully nationalized as of three years ago. Would they have taken more risk or less risk?)" And my response: "Although I'd like to nationalize a few banks in this mess, I agree with you. We don't need to run them, especially if we have narrow/limited purpose banks. I didn't like this idea at first, but if it allows the existence of risk-taking non-insured institutions, then I'd be for it." Maybe we didn't use the correct hand gestures. This is from Arnold Kling on EconLog on February 9th:

“Taleb, like me, wants to get rid of risk-taking by banks, and leave non-insured institutions free to take whatever risks they want, as long as they are not creating risks for others. His solution is to nationalize banks. (me: why would this mean that they would not take risks? Suppose that Freddie Mac and Fannie Mae had been fully nationalized as of three years ago. Would they have taken more risk or less risk?)”

And my response:

“Although I’d like to nationalize a few banks in this mess, I agree with you. We don’t need to run them, especially if we have narrow/limited purpose banks. I didn’t like this idea at first, but if it allows the existence of risk-taking non-insured institutions, then I’d be for it.”

Maybe we didn’t use the correct hand gestures.

]]> By: Taunter http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/comment-page-1/#comment-6576 Taunter Wed, 09 Sep 2009 21:24:48 +0000 http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/#comment-6576 That macro view is the job of Treasury and Congress. And even if you believe that there needs to be a single-purpose agency charged with the task, by all means, don't make it the same agency that defends the dollar. That macro view is the job of Treasury and Congress. And even if you believe that there needs to be a single-purpose agency charged with the task, by all means, don’t make it the same agency that defends the dollar.

]]> By: Lord http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/comment-page-1/#comment-6572 Lord Wed, 09 Sep 2009 20:38:52 +0000 http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/#comment-6572 That is the regulatory system we had, boring commercial banks and exciting investment banks. It doesn't work when even the exciting ones become too big to fail. That is the regulatory system we had, boring commercial banks and exciting investment banks. It doesn’t work when even the exciting ones become too big to fail.

]]> By: Mike http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/comment-page-1/#comment-6570 Mike Wed, 09 Sep 2009 20:15:52 +0000 http://blogs.reuters.com/felix-salmon/2009/09/09/where-bank-regulation-is-headed/#comment-6570 Wouldn't giving the Fed that kind of regulatory capacity just continue the slow-motion dismantling of the 1951 Accord? It would seem to violate the spirit of that agreement, even though technically the Accord was between the Fed and Treasury. Wouldn’t giving the Fed that kind of regulatory capacity just continue the slow-motion dismantling of the 1951 Accord? It would seem to violate the spirit of that agreement, even though technically the Accord was between the Fed and Treasury.

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