Why do I blog so much about financial regulatory reform? Maybe because over a fairly short career of 12 years in the business, about half of those years were spent enduring some of the most destructive calamities in the history of free markets. I’m 33 and have seen enough monetary death and dismemberment to last me 3 lifetimes. Volatility and cycles I can deal with…locusts, pestilence and nuclear detonations are a bit much already.
And I don’t want to hear from any of you Crash of ’87 wusses, we do those types of selloffs like every day.
Anyway, Joe Nocera is back and is dismayed at what he sees as a fairly useless potential bill to be hammered out over the next week or so as the Senate and House versions are melded together…
From the New York Times:
In the first place, there is nothing even remotely radical about anything in these bills. Nobody is suggesting setting up a new Securities and Exchange Commission, which reshaped Wall Street regulation when it was formed in 1934. Nobody is talking about breaking up banks the way they did in the 1930s with the passage of the Glass-Steagall Act. Nobody is even talking about a wholesale revamping of a regulatory system that so clearly failed in this crisis. “They are trying to attack the symptoms, instead of the basic issues,” said Christopher Whalen, managing director of the Institutional Risk Analyst. There is something oh-so-reasonable about these bills, as if Congress was worried that they might do something that would — heaven forbid! — upset the banking industry.
The gist is that the new reforms being proposed are not even sufficient enough to have prevented the last crisis, let alone the next one. Well good, as long as the 5 largest banks can live with the proposals, I suppose they must be just fine for the rest of us. Rock on.