07.05.10

Eliot Spitzer on Financial Reform

Posted in Politics and Policy at 9:44 am

Eliot Spitzer has written a thoughtful analysis of the financial reform legislation for Slate.

How Washington Blew Its Chance To Bring Real Change To Wall Street

He reaches most of the same conclusions I did in my analysis, namely:

  1. The legislation mainly shuffles around existing regulators and leaves way too much to their discretion, and
  2. The good parts of the legislation (Volcker Rule and derivatives reform) were seriously watered down during the negotiation process

He also does a deep dive into the governing structure of the Federal Reserve, which is quite informative.

There are some real chestnuts in here:

The end result is an almost perfect illustration of not just how legislation is made but how politics works. Proponents of the bill continue to talk in grandiose terms of reform, but the actual terms of the bill provide continuity in both power and structure.

And:

In traditional Washington fashion, under the current reregulation bill, there is a “compromise” that permits the illusion of reform but leaves the status quo intact.

And:

And when you examine any of the so-called reforms, the same reality emerges. Virtually nothing has changed. Oh, the atmospherics are different, perhaps, and maybe a momentary lesson has been learned. But there is a reason bank stocks rose the day the final agreements on the financial regulatory bill were announced. The smart money knew which side had won.

Overall, an excellent read.

1 Comment »

  1. Disequilibria: A Constant State Of Instability » Eliot Spitzer on … Ecommerce on Me said,

    07.05.10 at 12:54 pm

    [...] more: Disequilibria: A Constant State Of Instability » Eliot Spitzer on … By admin | category: eliot spitzer | tags: analysis, bring, bring-real, chance, change, [...]

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