"Regulating away the risk of a repeat will involve doing away with much of the complexity that has broadened and deepened US capital markets over the last thirty years."--MM
you're a real hoot~
credit markets are frozen stiff, as never seen before, and you're talking about the majestic breadth and depth of our 'capital markets'??
By the way, Martin used the 'punch bowl' analogy, because calling the FedRes' role= distillery of first (last, and always) resort, would have given the game up..
I don't doubt for a minute that the complexity was indeed a product of the investment bankers trying to get out from under the regulation, and I don't doubt that they will continue to try and do this. Your point about the markets being more effective with light regulation is more than plausible. But isn't this part of the regulatory deal--more stability in return for curtailment on some activities.
Your argument that regulatees will always be trying to get around the regulators is no reason for not trying to regulate. Its a bit like saying people will always find ways of killing each other so we may as well not go to the expense of having a police force. It is only if the regulation is demonstrably futile or counter-productive that could dismiss it.
There does seem to have been some dreadful misselling of mortgages. We saw this in the UK with pensions a while back, which led to some huge compensation payouts and safeguards put in place. Is nobody thinking in these terms in the US?
The only problem CHRIS and MEGAN is that you are equating giving out high risk loans with felonies, specifically murder. Why don’t we make a more apt comparison and say that they are more akin to the types of transactions that take place at the track at Santa Anita or Harrah’s in Tahoe. The windfalls that transpire everyday from such don’t inspire calls for tight regulation from you folks (at least I don’t think they do) as well they shouldn’t, and as long as the information is so readily available in every paper in the country, let the buyer beware. If some people are stupid enough not to learn from a mistake that big, I’d venture a guess that the fault is not in their stars, but in themselves, and reordering regulation will not only not stop so-called “predatory lending” but more importantly the fundamental behavior in many human beings to walk head on into danger, that they might profit at some great expense. This impulse to reorder man’s nature lies at the core of the folly in financial regulation.
"Regulating away the risk of a repeat will involve doing away with much of the complexity that has broadened and deepened US capital markets over the last thirty years."--MM
you're a real hoot~
credit markets are frozen stiff, as never seen before, and you're talking about the majestic breadth and depth of our 'capital markets'??
By the way, Martin used the 'punch bowl' analogy, because calling the FedRes' role= distillery of first (last, and always) resort, would have given the game up..
I don't doubt for a minute that the complexity was indeed a product of the investment bankers trying to get out from under the regulation, and I don't doubt that they will continue to try and do this. Your point about the markets being more effective with light regulation is more than plausible. But isn't this part of the regulatory deal--more stability in return for curtailment on some activities.
Your argument that regulatees will always be trying to get around the regulators is no reason for not trying to regulate. Its a bit like saying people will always find ways of killing each other so we may as well not go to the expense of having a police force. It is only if the regulation is demonstrably futile or counter-productive that could dismiss it.
There does seem to have been some dreadful misselling of mortgages. We saw this in the UK with pensions a while back, which led to some huge compensation payouts and safeguards put in place. Is nobody thinking in these terms in the US?
The only problem CHRIS and MEGAN is that you are equating giving out high risk loans with felonies, specifically murder. Why don’t we make a more apt comparison and say that they are more akin to the types of transactions that take place at the track at Santa Anita or Harrah’s in Tahoe. The windfalls that transpire everyday from such don’t inspire calls for tight regulation from you folks (at least I don’t think they do) as well they shouldn’t, and as long as the information is so readily available in every paper in the country, let the buyer beware. If some people are stupid enough not to learn from a mistake that big, I’d venture a guess that the fault is not in their stars, but in themselves, and reordering regulation will not only not stop so-called “predatory lending” but more importantly the fundamental behavior in many human beings to walk head on into danger, that they might profit at some great expense. This impulse to reorder man’s nature lies at the core of the folly in financial regulation.