Saturday, January 23, 2010

Quick take on proposed banking Regs

Quick take on Obama's banking regulatory proposals:

Good:
  • placing limits on deposit taking institutions on leverage and size
  • prohibiting proprietary trading from deposit taking institutions

Bad:
  • does not get rid of "too big to fail" syndrome
  • would not have stopped firms like Bear Stearns and Lehman Brothers from failing or being propped up, even though they are not deposit taking institutions.
  • does not address the issue of regulatory capture
  • does not address culpability of SEC, congress, and Fed in causing problem.
  • Goldman Sachs comes off as a huge winner at the expense of its competition.

1 comment:

Fibocycle said...

It is not a surprise that GS comes out of the fog further empowered.
These guys may try to fabricate some feeble replication of Glass Steagall but until the 'system' embraces the concepts of transparency, responsibility and accountability behavior on Wall Street will be best described: Plus ça change, plus c'est la même chose