- Question of the Week: Readers Respond to Money Morning's Financial Reform Query
- It's Time For "Banks" to Stop High-Risk Trading
- An Open Letter to President-Elect Barack Obama: How a Regulatory Makeover Can Fix the Financial Crisis
- Only Tighter Regulation Will Stem this Crisis of Confidence
- How Deregulation Eviscerated the Banking Sector Safety Net and Spawned the U.S. Financial Crisis
- How Subprime Borrowing Fueled the Credit Crisis
- How Wall Street Manufactures Financial Services Products
The Senate's second attempt at bringing the reform bill to debate occurred yesterday (Tuesday) on the same day as Goldman Sachs Group, Inc (NYSE: GS) executives - including vice president Fabrice Tourre, the only individual named in the suit - faced the Senate Permanent Subcommittee on Investigations in Washington. Tourre denied the Securities and Exchange Commission's charges and said the product in question "was not designed to fail."
Goldman was the recipient of $10 billion in bailout funds - one of the most contested topics halting financial reform progress.
The uproar over taxpayer-funded financial institution aid along with the looming financial regulation overhaul prompted our fifth installment of Money Morning "Question of the Week:" How do you feel about the status of financial reform? Has it gone far enough - will too much regulation crimp our free market system? Or does it need to go much further - and can the powers-that-be create an effective reform proposal?
Here is a collection of reader responses showing concern for the future, questions over government spending, and ideas for improvement.
Volcker wants to make it illegal for banks to engage in such high-risk activities as "proprietary trading" - when an institution trades for its own accounts, as opposed to making trades for customer accounts. But as Volcker's comment illustrates, the proposal - known as "Volcker's Rule" - the whole concept of high-risk trading is pretty hazy and hard to define.
Just as hazy is the definition of what now constitutes a bank.
Long gone are the elegant subtleties of form and finesse that once defined the bank. In recent years, the entire concept has been cheapened by the vulgar obviousness of grossly enhanced compensation schemes.
No company better embodies this transformation than Goldman Sachs.
To find out why high-risk trading should be banned, read on...
Dear Mr. President-Elect:
The people of the United States have spoken. Their collective voice resonates loudly and overwhelmingly in praise of your vision and promises for America the beautiful.
Over the many voices, the chorus of a common refrain resounds: There is nothing we as a people cannot do if inspired by confidence in our president, honest and transparent democratic government, and equal opportunity in pursuit of our happiness.
The truth is there were many.
Fundamental and pragmatic banking regulations, which arose from the devastating financial collapses of the Great Depression, for decades strengthened U.S. banks and capital markets, making them the twin engines of American growth and the envy of the world.