Ben Bernanke's predessor, Alan Greenspan thinks it is difficult to prevent bubble. That was part of the mentality The Fed will always come in as crisis manager rather than playing prevention roles. What is this program anyway?
Quote
• What's New: The Fed would get a new role as the supercop in charge of financial-system stability under Treasury Secretary Paulson's plan.
• The Concern: It's hard for anyone to anticipate a crisis in advance, as regulators have learned recently.
• The Gamble: That a streamlined bureaucracy will be more effective than the current regulatory patchwork. Unquote
I always like pictures, always paint better than a thousand words. See the history of how the US regulators learned from every crisis. They will quickly admit mistakes, hit hard on issues, fix it and move on. If only Malaysia can do the same, I will be very happy.
Will we get a more stable financial world?
Quote Mr. Paulson said the plan wouldn't necessarily prevent future financial crises. "I don't think any regulatory system is going to change that. I think we rely very, very heavily on market discipline. Having said that, I still think we need a system that is more efficient and gives us a better chance, gives us more tools to try to solve problems." Unquote
Give these guys a chance, doing something is better than doing nothing. Let's see whether they can build a better mouse trap to catch up with the recent times of financial engineering and innovation. But I can sense hedge funds and bankers will not like it, too much power and too intrusive. Wall Street will never change, greeds and fears will always be there, this will only slow things down a little but accident is a by product of innovation, get out from the kitchen if you cannot stand the heat.
No comments:
Post a Comment