Regulators have always failed to prevent scams of the past and the serious financial meltdowns we’ve experienced, as well. Piling on more regulation upon regulation amounts to political fig leaves which do nothing but make politicians and the media happy.
There are simpler ways to make banks safer. Forget about the stupidity and Volcker rules which are impossible to write because banks must constantly invest and hedge their own funds; it’s inherently part of their business.
One: Have the banks add more capital funds where needed.
Two: See to it that no “mark-to-market” accounting is ever imposed on them in illiquid markets.
Three: Put banks at risk if they fail. No bailouts for stockholders or bondholders in return for needed Government guarantees. (See the Earl J. Weinreb NewsHole® comments.)
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