Howard_T

Discretion and Financial Regulation: Always Doing the Wrong Thing

I don't understand the urgency to adopt new financial industry regulation when the necessary instrument is at hand. Glass-Steagall served well for 66 years, until Gramm-Leach destroyed it. All that really needs to be done is to re-enact Glass-Steagall with some necessary updating for the technology of 2010. It would also be wise to put in a provision for periodic review to ensure that the regulation was not only effective but also not overly onerous. Of course, this will not happen. Dodd and Frank will continue to make sure their pockets are lined by the banking industry. The industry, since it has most of the chips in the game, will continue to "buy the pot" whenever it needs to win one. Until the alliance between big government and big business is broken, the rest of us will continue to be victimized.

Is Too Big to Fail Now Too Big to Exist?

I say break them up into their constituent parts, banking, brokerage, etc. While you're at it, likewise break up the entire industry. I think this was once called "Glass-Steagle". This will force the largest of the banks to compete on a more even footing with the smaller regional banks, and should result in more money getting into the hands of businesses in the form of loans.

If the mega-banks are not broken up, remember this: Even Tyrannosaurus Rex was too big to fail, and we all know what happened to the dinosaurs.