Steven Pearlstein on Reforming Wall Street
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“And that's the problem with Dodd 2.0. There are so many political accommodations involving carve-outs and size limits and overlapping responsibilities that it creates exactly the kind of complexity, the opportunities for regulatory arbitrage and the lack of accountability that got us into this mess in the first place.”
“What's likely to emerge from these still-ongoing discussions is a comprehensive regulatory reform bill that not only has the support of key sectors of the financial services industry, but also improves on the legislation passed last year by the House. In committee, Corker could find himself the lone Republican voting for the bill unless Shelby decides to reassert his rightful role as the Republican dealmaker. But my guess is that once the bill reaches the Senate floor, Republicans will face the difficult political choice of either embracing financial re-regulation and handing the president a victory or defending industry practices that even Wall Street is now unwilling to defend.”
“It's even worse for a president to tear into Wall Street 'fat cats' one day and then let them off their leash the next.”
“With financial markets booming even as Main Street is still largely mired in recession, policymakers in Washington on Thursday were scrambling to contain growing populist anger by proposing new rules to curb runaway pay on Wall Street.”
“If [Wall Street] stumbles on a profitable trading strategy, the last person they are likely to share it with is you.”
“Call me simple-minded, but it seems to me that people who use a good or service should also be the ones who pay for it. That's how it works in most markets. And when it doesn't -- health care is a good example -- things tend to go awry.”
“It's now clear that the benefits of all that efficiency and liquidity are captured largely by the Wall Street middlemen rather than their customers, or the economy as a whole.”
“The proposals the Obama administration put forward this week to reform the regulatory apparatus were a bit of a disappointment.”
“The one thing [Congress] can't legislate is the good judgment of the regulators.”
“Regulators are unlikely to do much better during the next bubble unless we can find better ways to insulate them from Wall Street's outsize political influence.”
“However, given the depth of the current crisis and the virulence of Wall Street's culture, Mary Schapiro is not the change we need.”
