Friday, October 10, 2008 at 12:47 pm
What regulation needs to look like
Heidi Moore of the WSJ has a fascinating account of a panel discussion this morning featuring Jamie Dimon of JP Morgan Chase, Larry Fink of BlackRock, Lloyd Blankfein of Goldman Sachs, Steve Schwarzman of Blackstone and Glenn Hutchins of Silver Lake. I know a lot of people have soured on anything anybody on Wall Street says, but this bunch is pretty danged smart and I'm a big fan of Dimon and Fink in particular. Anyway, go on and read the whole thing if you're interested. But here's a nice snippet from Fink:
“Any institution that manages over $5 billion should be regulated, whether it's public or private, an insurance company, bank or private equity fund.” He wants regulation that is principles-based and consistent so that “capitalism will not arbitrage between regulators, capitalism will not arbitrage between public and private. Capitalism at its finest had the ability to arbitrage between different regulators, capital structures and platforms.”
4 Comments to “What regulation needs to look like”
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Friday, October 10, 2008 at 2:07 pm
other than "big" I saw nothing about what changes should be made to regulations.
Indeed, no one at the table was willing to acknowledge how their way of doing business was responsible for the crisis. One of them even had the nerve to blame the government for allowing home values to go up.... while the "real estate problem" was the pin, asset inflation was just as bad, if not worse, on Wall Street, and at least you had something real in real estate, as opposed to the completely imaginary wealth of the derivatives market that was the creation of wall street and its ilk.
Friday, October 10, 2008 at 2:14 pm
I agree about the need for minimal but effective regulation. However, even though in this crisis I favored a version of the Swedish Plan, partly because, based on the market's reaction to the Lehman decision, I believed that it is the best real option, I also believe that there was an implicit government guarantee to intervene in a crisis such as this which helped fuel the earlier investments and the actual expectations of what would happen in a crisis. I believe that such a , now explicit guarantee, needs to be examined. I'm wondering if you do as well.
Friday, October 10, 2008 at 2:15 pm
I'm sorry about the four posts. My computer kept telling me to try again. I hope you can delete three of them. Sorry, Don
Friday, October 10, 2008 at 2:47 pm
@DtlD: Done. Sorry about our irritating blogging platform.