Friday, October 30, 2009

KISS, Bank Version

As usual, Barry Ritholtz endorses common sense.

• Federal Reserve should set monetary policy, not regulate banks.(They’ve demonstrated they are incompetent at the latter)

• Treasury should over see taxing and spending policies, executing that via IRS, Mint, etc.

• The FDIC, the entity in charge of insuring the banks deposits, should make sure these banks don’t blow themselves up

Won't happen, but hey! That's Gummint.


J. Strupp said...

Sounds reasonable. That being said, oversite of "Too Big to Fail" Institutions, regardless of who's doing it, isn't going to be enough. Josh Rosner does a great job of pointing this out here:

Bottom line, TBTF institutions cannot continue to exist in their current form. But, of course, doing the right thing would require Congress to bite the hand that feeds them and their campaigns.

Dad29 said...

Right now, the most influential Congresscritters FOR the Banks are Frank and Dodd.

Dodd may bo away soon.

Dad29 said...

By the way from your link:

As part of this Japanese-style kick-the-losses-down-the-road kabuki drama

Applies to MUCH worse situations, too--like SocSec and Medicare.

J. Strupp said...

...and unfortunately, the only solutions to each one of these crisis' involves massive tax increases and better fiscal discipline (after we get through the current financial/economic crisis that is).

Conservatives better understand that tax increases are as unavoidable as fiscal restraint in the near future (and liberals the opposite). There is no other alternative.

BTW, make sure to catch the Fergeson/Rogoff discussion that Ritholtz links to. I caught it live the other day and I can tell you the first 20 minutes of the discussion are fantastic. They talk at length about this issue. FYI.