Barack Obama plans fast action to tighten financial rules - International Herald Tribune
WASHINGTON: The Obama administration plans to move quickly to tighten the nation’s financial regulatory system.
Officials say they will make wide-ranging changes, including stricter U.S. government rules for hedge funds, credit rating agencies and mortgage brokers, and greater oversight of the complex financial instruments that contributed to the economic crisis.
I don’t know if you are still functioning as financial editor, but I’d be interested in hearing your take on these new Obama rules.
You’re previously taken the cynic’s position that government is fully capable of screwing this stuff up, so I’m curious: Is that what is happening now? Are Obama and the Dems screwing it up? What’s your take on his plans for regulating the “hedge fund industry?”
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It’s likely that I will have trouble following Nemo’s analysis. This should be interesting in that several of the people involved with correcting the problems were involved with creating them. I’d wager that they’ll create at least 2 problems for every 1 they “solve”.
Didn’t you know? Nemo went off to Washington, where he could Make a Difference™. Either that or he’s a rodeo clown.
Rodeo clowns serve a useful purpose.
Can the government make things better?
Yes.
Will the government make things better?
No.
In theory, regulation to improve transparency (e.g. open and transparent exchange markets for these complex financial instruments), reduce fraud, prevent institutions from becoming “too big to fail,” and stop overleverage to the extent that it can threaten the entire system, in theory, such regulation can help.
In practice, I expect unintended consequences galore, rewarding of past stupidity and failure, and creation of new entities that are even too bigger to fail.