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I would imagine if we get a decent piece of legislation, the final result could be like Sarbanes-Oxley in 2002 following the Enron scandal. I believe it passed unanimously in the Senate, and only a couple Representatives voted no in the House.
In any case financial reform is pretty damn important, so I would hope the Democrats would not half-ass it.
Reform is badly needed, but this isnt the reform. Its just more government, creating more government jobs, and passing more fees onto the consumers.
The reform needed is
1) Banks should not be able to invest FDIC insured funds into securities like stocks
2) Derivatives should have a margin requirement, similar to stocks. The amount of margins should be determined by the same organization who controls margin requirements on stocks, bonds, options etc. The margin requirements should be rather similar for all investment mechanisms for the same company..
3) Investment funds should be allowed to fail, with the costs being paid by investors, not members of other banks, and not taxpayers. With proper margin requirements, the number of funds failing which exceed assets of the fund would be greatly minimized.
4) Investment banks should be encouraged to borrow long term rather than short term for capital expenses. Borrowing for day to day operating expenses should be seriously discouraged.
5) The government should stop insuring and managing every mortgage in the country, leaving individual banks to determine the viability of the loans. If the banks deem $0 down is appropriate, so be it.. The problem wasnt $0 down mortgages, the problem was that banks were not responsible for the losses, and passed them onto the federal government, so they didnt care who they were giving loans to.
1) The money would come from banks, but this is a bill for hedge funds and other investment mechanisms. How will they pay? (already the top 5 are excluded from the bill I hear)
2) The banks already pay, its called FDIC insurance
3) What happens to funds like Bernie Madoff, when they get taken over? Who bails them out? (hint, taxpayers)..
4) What happens when the amount needed is more than the fund has? (similar to the recent economy? Who pays? (hint, taxpayers)
5) Why would you not want these hedge funds to go into bankruptcy and the money be lost by those who invested in the failed businesses? The way this is laid out, all businesses put money into a pot to bail out the failed businesses, you dont think that will entice ilreponsible investing?
6) Why wouldnt the investors be the one to pay, rather than the other banks?
7) Where do you think the banks will get the money from? (answer, consumers. Its another hidden tax)
1. Do you have any links
2. This would specifically be for if they fail
3. The tighter regulations on derivatives among other things, makes the chances of another Bernie Madoff situation less. The bill bans taxpayer $$ from being used.
4. The bill bans taxpayer funding from being used.
5. When its actually their own money at stake as opposed to taxpayer $$ the way it has been they are going to be more responsible.
6. The banks are the ones who played the bigger role in these risky pools.
1) The money would come from banks, but this is a bill for hedge funds and other investment mechanisms. How will they pay? (already the top 5 are excluded from the bill I hear)
2) The banks already pay, its called FDIC insurance
3) What happens to funds like Bernie Madoff, when they get taken over? Who bails them out? (hint, taxpayers)..
4) What happens when the amount needed is more than the fund has? (similar to the recent economy? Who pays? (hint, taxpayers)
5) Why would you not want these hedge funds to go into bankruptcy and the money be lost by those who invested in the failed businesses? The way this is laid out, all businesses put money into a pot to bail out the failed businesses, you dont think that will entice ilreponsible investing?
6) Why wouldnt the investors be the one to pay, rather than the other banks?
7) Where do you think the banks will get the money from? (answer, consumers. Its another hidden tax)
Quote:
Originally Posted by Smash255
1. Do you have any links
2. This would specifically be for if they fail
3. The tighter regulations on derivatives among other things, makes the chances of another Bernie Madoff situation less. The bill bans taxpayer $$ from being used.
4. The bill bans taxpayer funding from being used.
5. When its actually their own money at stake as opposed to taxpayer $$ the way it has been they are going to be more responsible.
6. The banks are the ones who played the bigger role in these risky pools.
7. Their own funds.
1) link to what?
2) So is the FDIC insurance.
3 Bernie Madoff wasnt investing in derivatives. So the chances of it occuring again is very likely. The bill might ban taxpayers money from being used, but all it takes is another bill to bail out a deficit from the fund.
4) See #3
5) Wrong.. Their money WAS at stake.. All this does is create a cushion for hedge funds to use in the event they fail. There was no bailout expectations prior to the bailout bill, (it was a first), were they responsible? No, having $50B in funds to cover them in the event they faill will not encourage them to be responsible. Its like someone saying "if you gamble your home at the roulette table, and lose, I'll reinburse you".. Do you think you'd take the chance?
6) Actually it was GS, AIG, Lehman Brothers and other investment companies, many of which are not banks..
7) Ahh right.. sure they will. If they use their own funds, their stock value will drop because it'll create a deficit on the spreadsheet and decrease their profits. I bet its more likely they just tack on a fee to the consumers thereby creating another hidden tax.
I just love how the right wing nuts are trying to claim that insurance is a government bailout. I mean it is laughable. Forcing banks to buy into an insurance pool (like the FDIC) is just common sense and doesn't cost the taxpayers a penny. It's the best way to insure bailouts don't happen again so, of course, Republicans are against it. They always say one thing and do the exact opposite.
I just love how the right wing nuts are trying to claim that insurance is a government bailout. I mean it is laughable. Forcing banks to buy into an insurance pool (like the FDIC) is just common sense and doesn't cost the taxpayers a penny. It's the best way to insure bailouts don't happen again so, of course, Republicans are against it. They always say one thing and do the exact opposite.
Right, what's 50 billion for a rainy day fund to an industry worth trillions?
Chump change.
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