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Regulating the Regulators
MattY points us to a Gillian Tett column in the Financial Times, which ends with this:
If regulators and politicians are to have any hope of building a more effective financial system in future, it is crucial that they
start thinking more about power structures, vested interests and social silence. That might sound like an irritatingly abstract or pious plea. However, it has some very practical implications about how policy is formulated. I will seek to flesh out some of those in next week’s column....
This is a surprisingly underdiscussed point, but it's something that's critical to how we think about financial regulation. If we want regulation to work, the regulatory structures need to be set up so that their institutional power bases push them in the direction we want them pushed. That's why, for example, I don't like the idea of the Fed gaining more power over consumer regulation: it's institutionally and culturally oriented toward the financial community and macroeconomic management. Consumer regulation will never be taken seriously there no matter how many laws we write.
I'm not sure if this means that an entirely separate agency needs to be set up or not, but whatever we do has to take account of how power actually works. Not only does consumer financial regulation need to be in the hands of someone who considers it their prime responsibility, but it needs to have committee support in Congress and some kind of natural constituency with serious political juice and a financial interest in making sure consumer regulation works. Otherwise it will sink into bureaucratic oblivion. Suggestions welcome.
also about health care
This will necessarily associate with quality control of healthcare.
Consumer regulation in general is, fundamentally, a healthcare issue.
Gillian Tett often offers
Gillian Tett often offers views beyond the perspective of most financial writers. At this point there seems to be little support in Congress for any real discussion of actually controlling the beast. Much hand wringing, but little evidence of any will to actually do anything substantive.
No one cares
Yes, absolutely correct. Not enough people give a fuck, so financial re-regulation is a dead issue. One of the most important issues facing us in the last 50 years, but it will go completely unaddressed in a serious way. Too bad.
Consumer Protections
We can see this as a way to move from the National Security State to the National Healthcare State.
What is society for, if not healthcare?
What is a country for, if not healthcare?
The Consumer agency cited
is for Financial Products.... F*** all to do with healthcare.
For once I agree
Good post.
(Although I am sure you will blow back and forth on Fed overall)
Which is why I have been telling Drum to think and worry about Structure of Financial Sector Regulation, not specific Regs as he has been for months.
And not a minute sooner.
What is the Money Party position on regulating the financial industry? Money rules, right?
We'll get genuine regulation when they say we can. Probably the day after tomorrow.
The big picture, please.
What we have now, one agency regulating this, another overseeing that, one body in New York, another in California, this state with lax regulations, this state with tougher rules, is the recipe that cooked our goose. With this horrible mess, no one can see the big picture, no one has authority over more than a piece of the puzzle, and regulators can be shopped like appliance stores for the best deal. Plus, no single agency knows what the others are doing. Congress and state legislators are equally bamboozled, off-the-radar regulators can be bought, and the public (remember them?) is the last to know. I'm no expert in any area of financial regulation, but it doesn't take a genius to see that, whatever the policy arena, this sort of "system" is nothing but a disaster for the common good.
More or less, yes
Thus my argument over and over these past months that Structure not credit ratios is what Drum should be drumming on about. Easier to explain, understand and sell.
As for the Money Party question supra, I would opine that it would be possible to get a significant portion of the financial industry, or at least the most influential on board, by promising simplification, reduced regulatory reporting burdens, etc. (It's not just the actual rules, its also the duplicative compliance).
A unified, simplified but tightened structure would very likely result in both better actual regulatory implementation, plus reduced cost.
Yes
I think without a new, proper, streamlined structure, the actual content of future regulations won't matter that much. New rules would still be balkanized, incomplete, and impervious to oversight. There's sure to be a debate on the structure itself, but that has to happen before the arguments about specific regulations can begin.
Quite right
And unless anything with significant national reach is regulated Nationally, you have rubbish as well. It stuns me that something like an AIG had a provincial regulator as its prime regulator (NY or Connecticut or both). There is no way for them to have the weight to supervise an entity with international reach.
Even with complete rules, as the current credit situation has shown, even plain vanilla things can go badly wrong when the same set of rules, theoretically, can be gamed between competing regulatory entities. Competition in markets is wonderful and should be promoted. Competition in oversight of financial sector is disastrous.
It's the idea of consumer product regulation at all
Lounsbury,
It's the idea of consumer product regulation at all that's at issue.
Republicans are against the very idea at every possible point. They think caveat emptor is written in the Bible.
It boils down to the simplest premise, what is your money actually for, if not to protect your health?
Keeping alive is what everything boils down to.
Eh, are you retarded?
There already is a consumer protection function in the US focused on financial services, one for securities market (well several), and then for credit - both state level and national level.
This has NOTHING to do with your bloody health care you obsessive dimwit.
Your idea is stupid
As well as badly expressed. Reform of financial sector regulation is not entirely "consumer protection" nor is a number of other pressing issues. Connecting Health Care and Financial Sector reform via a tenuous sharing of a superficial phrase is wooley headed idiocy.
Tops any idea you've ever had in these past seven years
Tops any idea you've ever had in these past seven years. Let me count them: none.
Gutless, or just uninteresting? I can't decide.
I can never tell if you're having a late night or an early morning. But, seriously, trying to kill a hangover with meth will just mess you up.
For a dying person all issues condense to one.
Now I'd like to know
In what way would you create universal healthcare in the United States and eliminate or permanently wreck the Republican Party and the social conservative power base?
Republicans are the worst people on Earth and you haven't seen anything yet from these people.
Look at this,
http://www.openleft.com/diary/14760/its-the-fascism-stupid
So, how would you fix it?
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