Wall Street still wants the American people to believe that the causes of the financial crash are too complicated for ordinary folks to understand. But fundamentally, when you get down to it, the real cause comes down to pure old greed. Mortgage brokers sold unaffordable mortgages to collect their commissions. Stock brokers made huge, risky bets in order to get big bonuses. And now that the American taxpayers have rescued Wall Street, we see that greed is making a real comeback.
Fortunately, the FDIC – the agency that insures bank deposits – is trying to do something about it. The FDIC wants banks that hand out big bonuses for risky behavior to pay higher insurance premiums. Just like a reckless driver pays more for automobile insurance, these banks would pay more if they insist on rewarding recklessness. The FDIC took public comments on the proposed new rule up until February 18th. The big banks fought hard against the rule and many of the comments made to the FDIC were from bankers. The FDIC needed to hear from ordinary, hard-working Americans who got stuck with the bill when these big bankers wrecked our nation’s economy. Hopefully, they did. Those in Congress have an obligation to take the actions necessary to make sure the financial institutions are properly regulated. They failed to live up to that responsibility in the past and we see what happened to our economy as a result. There are several truths that really can’t be disputed and a few of them are:
It will be interesting to see what the FDIC does with the proposed rule. Hopefully, it will do the right thing and make it final. In the meanwhile, the American people should put pressure on members of Congress to act immediately to improve regulation of this country’s financial institutions. That pressure must be applied until all necessary legislation is passed.
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