How will we know if financial reform is working?
Annie Lowrey* spent Monday at a conference on how we'll know whether financial reform is working. The answer? It's hard to say. I found Rep. Brad Miller's take to be the most convincing -- and the most depressing:
“[Reform] would be working if the banks were making a lot less money,” Miller argued. “The reality is for it to be successful it has to be a win-lose-win,” with markets and consumers winning, and banks losing. The Wall Street Journal reported yesterday that financial-sector corporate profits are near their all-time highs.
But there are optimistic signs, too. I'd just add that we need to be clear about what we mean by "working." I'm pretty sure financial reform will make it easier to deal with the next crisis. I'm pretty sure that financial reform will make it easier for regulators to spot the next crisis. I'm less sure that financial reform will do much to prevent the next crisis. There's nothing like FDIC insurance that automatically prevents the type of panic-inducing bank run -- in this case, a shadow bank run -- that we just saw. And then there are the international questions.
Posted by: jkaren | October 5, 2010 9:57 AM | Report abuse
Posted by: visionbrkr | October 5, 2010 10:00 AM | Report abuse