An article in American Prospect provides a good summary of what caused the problem and proposes several reforms:
Quote:
Our current crisis is the result of the misguided notion that financial markets can regulate themselves. Here's a rundown of the mistakes we've made and the three reforms we need now.
Seven Deadly SinsSin One: Allowing Mortgage Lending to Become a Casino.
Sin Two: Allowing Unregulated Bond Rating Agencies to Decide What was Safe.
Sin Three: Failing to Police Sub-prime.
Sin Four: Failure to Stop Excess Leverage.
Sin Five: Failure to Police Conflicts of Interest.
Sin Six: Failing to Regulate Hedge Funds and Private Equity.
Sin Seven: Repeal of the Glass-Steagall Act.
And three basic reformsReform One: If it Quacks Like a Bank, Regulate it Like a Bank.
Reform Two: Limit Leverage.
Reform Three: Police Conflicts of Interest. Seven Deadly Sins of Deregulation -- and Three Necessary Reforms
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The "free marketeers" wont like what they read.