Fight disinformation. Get a daily recap of the facts that matter. Sign up for the free Mother Jones newsletter.

Slowly but surely, the Obama administration is rolling out its vision for reformed financial regulation:

Treasury Secretary Timothy Geithner will call Thursday for changes in how the government oversees risk-taking in financial markets, pushing for tougher rules on how big companies manage their finances as well as tighter controls on some hedge funds and money-market mutual funds.

….The new rules will likely require financial institutions to hold more capital as a buffer against losses and will bolster risk-management standards. All told, the proposals would mean significant expansions of power for the Treasury, Federal Reserve and other regulators.

This is all well and good, though I’m still a little hazy on what underlying principles are guiding all this stuff.  That aside, though, I wonder how much good this will do all by itself.  After all, the problem during the housing bubble wasn’t a lack of regulatory authority, it was a lack of regulatory will.  The Fed could have insisted on stiffer mortgage lending standards, but it didn’t.  Alan Greenspan could have pushed for higher interest rates to slow down the rate of credit expansion, but he didn’t.  Congress and the president could have raised taxes and run budget surpluses, but they didn’t. The SEC could have tightened capital adequacy standards for investment banks, but instead it loosened them.

A more sensible set of financial regulations is long overdue.  But the bigger problem is ensuring that regulations actually get used, even when it means slowing down an economic expansion and spoiling everyone’s fun midway through the party.  I’m not quite sure how to deal with that — I’m not quite sure it’s even possible to deal with that — but it’s something we should be addressing if we’re even halfway serious about this stuff.

HERE ARE THE FACTS:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate