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Did We Waste The Crisis? Is the Pope Catholic?

Posted by Larry Doyle on August 13, 2013 8:16 AM |

In late November 2008, incoming White House chief of staff Rahm Emanuel told a group of corporate executives, “you never want a serious crisis to go to waste.”

Well, here we sit almost 5 years later. Is there any doubt that in terms of utilizing the crisis to implement the necessary meaningful financial regulatory and structural reforms, we have, in fact, wasted this crisis? Come on, do we even have to ask?

Adam Davidson of The New York Times would seem to believe the same as he wrote the following in a recent commentary:

Remarkably, five years after the crisis, the health of the financial industry is just as hard to determine. A major bank or financial institution could meet every single regulatory requirement yet still be at risk of collapse, and few of us would even know it.

Despite endless calls for change, many of the economists I’ve spoken with have lamented that the reports that banks issue about their finances remain all but useless. The sprawling Dodd-Frank Act, which rewrote banking regulation in 2010, didn’t resolve things so much as inaugurate a process of endless rules-writing by regulators.

Meanwhile, the European Union is in the early stages of figuring out how it will change the way it regulates banks; and the gargantuan issue of coordinating regulations across borders has only barely begun.

All of these regulatory decisions are complicated, in part, by a vast army of financial-industry lobbyists that overwhelms the relatively few consumer advocates.

I strongly believe that disparate views are put forth by those within the industry in order to intentionally muddy the waters and allow the can to be further kicked down the road.

Are there points of agreement amid the opacity that defines Wall Street and Washington currently? Davidson highlights that the few points of agreement among  two economists — Anat Admati and Charles Calomiris — on opposite ends of the regulatory spectrum are,

. . . that banks borrow too much, that the government rules are too confusing and that the public has been misled.

No doubt about those points as well.

Navigate accordingly.

Larry Doyle

Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.

For those reading this via a syndicated outlet or receiving it via e-mail or another delivery, please visit my blog and comment on this piece of ‘sense on cents’.

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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

 

  • coe

    LD – What a great way to enter the summer doldrums – I beg to differ with your premise – I don’t think the financial crisis was an opportunity missed…in fact, I think it has served to reinforce a number of critical characteristics that continue to define us – and not admirable ones at that…here are my top ten:
    o – Real leadership has been found wanting on all fronts – moral/political/financial/ethical – character has fled the scene of the crime;
    o – A problem delayed is a problem solved;
    o – The incestuous relationship between regulators and Wall St is pernicious and defies any will to address the problem – the best we can expect is a stand-off/yet the most we should hope for is so much more;
    o – Too big to fail is equivalent to too big to jail…incentives drive behaviors;
    o – Customers just happen to be part of the raw material used toward self aggrandizement – nobody (well, almost nobody) gives a patoot about customer service;
    o – It is perfectly acceptable to lie and cheat in all theaters of endeavor;
    o – Pretend to think global, but ALWAYS act in the local interest;
    o – The cult of personality in America transcends any semblance of right and wrong – should we really care what Bruce Springsteen thinks about Wall St? should we root for A-Rod or villify him, and should it matte ;
    o – Never ask for permission – only ask for forgiveness – if, that is, one is caught; and
    o – Hidden behind the vanguard of rascals, crooks, hippocrites, and all around bad guys – there lives a majority of well intentioned, honorable people that, given the chance, will always do the right thing. It is only in this realm that we stand a chance…and don’t dare count us out.

    Navigate on, LD, navigate on!

  • Peter Scannell

    Our new Pope is still Catholic, but is no longer deaf.

  • Van

    GREED AND THE HALF WHITED BRAINWASHED POPULACE HAS ALLOWED AND PROVIDED FOR A SYSTEM TAKE OVER THAT HAS RESULTED IN WHAT AMOUNTS TO A SUICIDE FOR THE BANKSTERS AND WALL STREET.

    THEY JUST COULD NOT RESIST TAKING ADVANTAGE OF THE SHEEPSTERS. BUT, THEIR ANSWER, LONG IN THEIR MINDS, IS TO JUNK THE SYSTEM AND GO WORLD WIDE. IT IS ACTUALLY ONLY THE SYSTEM THAT DIES… THEY DO NOT MISS THE OPPORTUNITY THAT DISASTER PROVIDES.

    EVEN WHEN THEY GO TO FAR…THEY WIN. THERE IS NO LIMIT TO THE POWER THAT MONEY HAS. IF YOU HAVE ALL OF IT. IT COMES DOWN TO THERE IS NO ALTERNATIVE APPARENT TO THE SHEEP

    IT IS POOR COMMENTARY FOR THE STUPIDITY OF THE SHEEP.






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