You could not be further from reality on this. As for "Unfortunately you never clarify these regulatory needs and so we are left to try and figure out what you mean.". You really must be clueless. I think you will find that most folks have read my clarifications on that subject so many times that they are sick of it. They might not like my opinion but they certainly have heard it. [I have written "Gramm/Leach/Bliley" or it's dirivities over 250 times on this board since 2006, in nearly every occasion in regard to its diminishment of regulatory powers to the financial sector.
Go back and read and understand three separate acts. 1) Glass-Steagall, 2) Gramm-Leach-Bliley and 3) Sarbanes-Oxley. Understand what their strengths and weaknesses were/are.
What you will find from all three is that NONE address leveling the playing field, none addresses special interests and none addresses anything more than throttle controls and safety valves that decide whether nor not to allow an event like 2006-2009 to occur in the Financial Sector.
So, to clarify, NO, you do not have the correct characterization at all. My position on regulations within the Financial Sector have not changed since I first posted on them in 2006. The only change is in the emphasis that the failure to enforce the regulations on the books and its contribution to the failures that we have been experiencing.
So let's get this straight.
You want Glass Steagall re-introduced
You want Sarbanes Oxley strengthened
You want Gramm Leach Bliley done away with
Is that what you seek?
__________________ Who's John Galt.
"Timeo Danaos et dona ferentes" - Virgil, The Aeneid, Book 2
Again, you need to go back and re read. That was not nor has been proposed in what I have written.
What new legislation that is introduced will be a hybrid of the three of them. That will be both good and bad. Good in that it will strengthen the legislative and regulatory package that allows governance of a sector that has proven once again that it is not capable of running sans regulation yet it will also be bad in that it will be introduced on the heels of such a financial catastrophe that there is a likelihood that it will overstep, much like legislation post 9/11 did.
Again, you need to go back and re read. That was not nor has been proposed in what I have written.
What new legislation that is introduced will be a hybrid of the three of them. That will be both good and bad. Good in that it will strengthen the legislative and regulatory package that allows governance of a sector that has proven once again that it is not capable of running sans regulation yet it will also be bad in that it will be introduced on the heels of such a financial catastrophe that there is a likelihood that it will overstep, much like legislation post 9/11 did.
So then tell us all what you think the legislation should address!
You continually call for more but what does that entail?
So then tell us all what you think the legislation should address!
You continually call for more but what does that entail?
First, I have always called for enforcing the regulations on the books. That is the first step. That is NOW being done.
As for what regulations of the sector that need changed, there are so many different sections that can be discussed it is not possible to "just make a list".
One, as an example would be on regulating how SubPrime is securitized and how, when lending institutions make loans, whether Prime or SubPrime they do all the things banks "used" to be required to do to make a loan: 1) verify income, 2) verify security, 3) credit verification and to insure the institutional balance of Prime to SubPrime to Assets is within safe margins. [Prior to GLB SubPrime accounted for 5% of loans, by 2008 that was 30%, much built on floating equity as banks flipped loans for new business].
First, I have always called for enforcing the regulations on the books. That is the first step. That is NOW being done.
As for what regulations of the sector that need changed, there are so many different sections that can be discussed it is not possible to "just make a list".
One, as an example would be on regulating how SubPrime is securitized and how, when lending institutions make loans, whether Prime or SubPrime they do all the things banks "used" to be required to do to make a loan: 1) verify income, 2) verify security, 3) credit verification and to insure the institutional balance of Prime to SubPrime to Assets is within safe margins. [Prior to GLB SubPrime accounted for 5% of loans, by 2008 that was 30%, much built on floating equity as banks flipped loans for new business].
So what about the CRA? What about Freddy and Fannie being commanded to buy the mortgages that nobody in good conscience would make unless the Government bought them? That should be enforced? Or should that be done away with?
So what about the CRA? What about Freddy and Fannie being commanded to buy the mortgages that nobody in good conscience would make unless the Government bought them? That should be enforced? Or should that be done away with?
You really need to get information on what Freddy and Fannie actually do. While they do back SubPrime, they also back Prime loans as well. They are the glue that, for the past decade allowed banks to loan so much money with so little concern for risk. [and I am not suggesting that is a great thing]
If banking examiners and federal regulators had ENFORCED the rules as were in place many of the FM/FM problems would not exist. They accepted everything, not just SubPrime.
Now, CRA. I love it when that is brought up. A couple of facts regarding the financial sector and CRA.
CRA ONLY applies to Depository Institutions (1).
Only 20% of SubPrime mortgages were issued by depository institutions under the CRA (1).
More than half of SubPrime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts. (1) (2)
Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. (3)
To simplify, CRA is merely a blip on the radar of the entire Financial Sector FAILURE. You have to look at lack of supervision in the markets regarding derivative financial products, CBOs, CDOs, Hedge Funds and extreme leveraging. Financially CRA is a fart in a tornado in comparison, but the only one that many on the right have been willing to use as an example because, for some reason it seems to only affect a certain segment of the population and the talking heads have spun hate and lies into the reality of its contribution.
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