Now that we have seen just how bad things can get relating to our nation’s economy, it’s time to get busy and correct the many mistakes of the past. It’s my belief that the root cause of most of our economic problems has been unregulated greed in Corporate America. The failure to regulate our financial institutions has resulted in this greed running rampant though out the entire system.
The Obama Administration and Congress must completely overhaul our nation’s financial industry. We have experienced the results of weak, and in some cases, no reform and all Americans are paying for that. Clearly, that’s where reform must start. But it must be a total overhaul and not one that stops short of a badly-needed reform of a broken system. The lack of regulation, and the fact that some in the industry totally avoided any type regulation, resulted in economic chaos for the United States.
The entire financial system – banks, hedge funds, credit rating agencies, regulators, investment banks, insurance companies, among others – is intertwined and interlinked. If government is to really solve the problem, no part of the financial industry can be left out of the regulatory system. Nobody can be allowed to avoid regulation in the future.
There is one thing for certain – transparency around valuing any risk in the financial system is an absolute must. This has to include any type indemnity or insurance that would play a part in mitigating a risk. The federal government must have the authority and ability to streamline and simplify financial information so that consumers and investors will be able to make real informed choices. We have experienced some of the “dumbest” things done by supposedly “smart” people who devised financial instruments that were never understood by investors or even government agencies.
The federal regulation must be designed for the twenty-first century and must be all-inclusive. The patchwork of regulation coming from countless state and federal agencies must be replaced with a strong centralized effort. I would prefer one strong federal agency with one set of rules designed to oversee all financial businesses – both those that pose systemic risk and those that don’t. But, that may be too simple an approach for government to comprehend. In any event, Congress must draft strong, clear federal regulation that will protect our country from ever having to go through what we have experienced over the past several months.
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