Coming Soon: Regulatory Banking Rearrangement

As in most cases when we see a failure in the economy, people turn to the government to fix it. Where this dependency on government came from, I have no idea. The latest talk of regulation is coming in the from the New York Fed President Mr. Timothy Geithner. Here is his quote from the Financial Times:

“At present the Fed has broad responsibility for financial stability not matched by direct authority and the consequences of the actions we have taken in this crisis make it more important that we close that gap.”

And he also stated this interesting and possibly positive comment about the system:

“a confusing mix of diffused accountability, regulatory competition and a complex web of rules that create perverse incentives and leave huge opportunities for arbitrage and evasion.”

Therefore, the argument should be for less regulation and not more. He is implying hopefully to make regulation more efficient but sometimes when the government does this it creates more bureaucracy. This isn’t necessarily more efficient. The example that comes to mind is the new Department of Homeland Security. The argument for this new department is that it makes the Coast Guard, border enforcement, airport security, and other things more efficient under one roof. Others, like myself, would consider this to be too much bureaucracy and puts too many chiefs in the tribe and not enough Indians.

Me and Mr. Geithner agree on the idea that regulation is complicated and should be made less complicated. The way we should do that is through deregulation and not rearranging the chairs on the Titantic.

The rest of the article can be found here.

~Marxsevelt

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3 CommentsLeave a comment

  1. […] Coming Soon: Major Banking RegulationsAs in most cases when we see a failure in the economy, people turn to the government to fix it. Where this dependency on government came from, I have no idea. The latest talk of regulation is coming in the from the New York Fed … […]

  2. […] Coming Soon: Major Banking RegulationsAs in most cases when we see a failure in the economy, people turn to the government to fix it. Where this dependency on government came from, I have no idea. The latest talk of regulation is coming in the from the New York Fed … […]

  3. […] Coming Soon: Major Banking RegulationsAs in most cases when we see a failure in the economy, people turn to the government to fix it. Where this dependency on government came from, I have no idea. The latest talk of regulation is coming in the from the New York Fed … […]


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