Over the last three years, I have read countless articles diagnosing the causes of the financial crisis. While each had a particular angle, virtually all cited the appalling regulation of the financial sector as the main driver behind the crisis. Banks experimented with poorly understood new financial products; they became over-leveraged; and generally failed to properly manage risk. Rather than take the full consequences for their poor decisions, banks foisted their losses onto the public sector.
These articles also emphasise the near universal consensus that financial systems need to be more closely regulated. Yet nothing has happened. Today, banks are operating under virtually the same regulatory regimes that existed during the bubble years.
Why have politicians across the world failed to act? I don't have an answer. I don't want to drift into the murky world of conspiracy theories, but bankers appear to have a strange hold over policy makers.
5 comments:
He who pays the piper calls the tune.
> These articles also emphasise the near universal consensus that financial systems need to be more closely regulated.
Well it depends. Banks don't need more regulation they need less. Just one regulation on reserves, and where and how they are held needs to be in place.
In this way SYSTEMATIC credit volume can be regulated, as too much credit was the cause of the problem.
"These articles also emphasise the near universal consensus that financial systems need to be more closely regulated. Yet nothing has happened."
The 'universal' consensus exists because the Labour party supporting media who had been promoting NewLabour policy for years wanted to cover up both the mistakes of Gordon Brown and their own lack of due diligence in covering reality over the last few years.
Their is absolutely no doubt in my mind that if the Conservatives had been in power (and I'm no supporter) the universal consensus would be pointing squarely in their direction.
Besides, there wasn't a consensus:
Authors@Google: Peter Schiff:
http://www.youtube.com/watch?v=tU8jCa_dKTM
Google Simon Johnson
"Why have politicians across the world failed to act? I don't have an answer."
THE gold standard commentator on the nature of the financial crisis is Professor William Black.
The Bill Moyers interview is no bad place to start:
http://www.youtube.com/watch?v=Rz1b__MdtHY&NR=1
Post a Comment