Comments on: Did Financial Rules Mandate a Meltdown?

By: Anonymous User

Anonymous User — Mon, 11 Jan 2010 03:45:09 +0000

Isnt this playing itself out again. Most of the banks who took TARP has now return the money and one reason is the restriction on compensation for executives. No one wants to manage a bank without getting rich themselves. Its greed playing itself again. – Tim

By: Anonymous User

Anonymous User — Mon, 11 Jan 2010 03:45:09 +0000

By: Tony Illia

Tony Illia — Sat, 24 Oct 2009 11:26:23 +0000

This is an interesting, well-researched and intelligently articulated story that sheds insight into a complex issue with no easy answers.

By: Frank Braconi

Frank Braconi — Fri, 23 Oct 2009 12:11:24 +0000

This is an interesting piece that makes several important points about how we accept uncritically economic assumptions and to the policy errors that leads to. But I think the critique of regulation in general, and banking regulation in particular, is a bit over-stated. The bank capital requirements didn’t force banks to buy certain mortgage-backed securities, they permitted them to under certain conditions (Would the banks have held safer assets if the capital standards didn’t exist?). The over-leveraging of financial institutions was not required by regulators, it was a strategy pursued by firms seeking maximum profit. Moreover, I believe that many of these toxic securities were stashed in QSPEs that were set up to circumvent capitalization standards. There’s nothing wrong with reviewing regulations to see if they are effective or produce unintended consequences, but that shouldn’t be confused with a revisionist view of the crisis that concludes that “regulation caused it.”