Wall street reforms

Here is a place to start with street reforms.

  1. Wall Street lobbyists outnumber congressional representative 10 to one. If such influence is not curtailed, even if a perfect system were put in place tomorrow it would quickly revert to its current state of corruption. Some measure is necessary to limit or eliminate this force.
  2. The Glass Steagal Act should be reinstated. Because the public cannot allow Banks to fail, Banks cannot be permitted to engage in investments that would risk their failure. Had Glass- Steagal not been repealed, the 2008 meltdown would have been impossible since it would have have had access to securitized mortgages and credit card debt.
  3. Dark financing must be prohibited. US regulators must have access to all transactions, and regulatory agencies such as the SEC and Federal reserve must increase their staffs significantly so that spot checks are frequent, deeply intrusive and conducted by personnel with the sophistication necessary to not be fooled by complexity or opacity of the exotic instruments and systems in common usage.
  4. Derivatives cannot be allowed to be weapons of mass destruction as Buffett calls them. All derivatives must be properly collateralized. Allowing people to take out insurance on their neighbors houses (such as with naked credit default swaps) encourages a casino atmosphere with perverse incentives that rewards financiers for vandalizing the credit worthiness of businesses, and city, state and national governments.

About John JMesserly

Mostly harmless

Posted on 2011-10-26, in lobbyists, reforming congress, regulation, wall street reform. Bookmark the permalink. Leave a comment.

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