It’s quite apparent that Congress must take immediate action to strengthen the regulation of Wall Street firms. Something must be done to clean up what has turned out to be a real mess as soon as possible. Unless this broken system is fixed, I fear that there will be more situations similar to the virtual collapse of Bear Stearns and the meltdown of the mortgage markets. While Congress must strengthen oversight of financial institutions, getting it done won’t be easy. We have seen what a colossal mess resulted from deregulation and it’s obvious that approach hasn’t worked and won’t work in the future. The meltdown in credit markets exposed significant weaknesses in the nation’s tangled web of federal and state regulators.
There is too much wrong in the existing regulatory structure to fix it and that is quite evident. Overseeing the practices across the entire array of commercial banks, Wall Street firms, hedge funds and nonbank financial companies will be a real challenge. Nevertheless, we must have tighter control over all financial markets. I am not sure what form the fix should take, but an overhaul is in order.
I really don’t expect anything of significance to be finalized so long as George Bush and Dick Cheney are in office. However, Congress can’t afford to wait for the next president to start his or her work. It’s time for the leadership of the House and Senate to get down to some serious work in this critically important area of concern.
Source: New York Times
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