“Attention all planets of the Solar Federation. Attention all planets of the Solar Federation. We have assumed control. We have assumed control. We have assumed control.” – Rush 2112
So we have a proposal from President Obama for more financial regulation. Surprise, surprise! According to the President, his new plan will accomplish the following:
- Require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation
- Increase market discipline and transparency to make our markets strong enough to withstand system-wide stress and the potential failure of one or more large financial institutions
- Rebuild trust in our markets by creating the Consumer Financial Protection Agency to focus exclusively on protecting consumers in credit, savings, and payment markets
- Provide the government with the tools needed to manage financial crises so it is not forced to choose between bailouts and financial collapse
- Raise international regulatory standards and improve international coordination
I confidently predict that Obama’s financial reform plan, like its predecessors, will only lead to more financial crises in the future. Wall Street will figure out ways to evade the onerous regulations, as it always does. Wall Street collectively is far smarter than any politician or bureacrat.
It would be oh so nice to see some fresh thinking from politicians on financial reform, as I noted in a previous blog post earlier this week. More regulation like Obama’s proposal is a road to nowhere. We’ve seen this movie before and we should all know by now how it ends.
plus ca change, plus c’est la meme chose…
