Obama's Seven Principles: No Details To Bore Us
As a kid, I was afraid of double dutch jump rope, where you have to slip between two moving ropes and start jumping. Inevitably, one of the ropes would smack me on the head as I ducked in.
I face my first days on this blog with similar trepidation. Out there in the world of financial re-regulation, everything's already in motion. I'm not sure where and how to jump in, and I'll probably get smacked on the head the moment I do. And every week brings new and exciting developments, like a bunch of Senators wondering which of AIG's regulators did the worst job.
But here goes. Let's start with the very big picture: the Obama administration's seven principles for "transforming the nation’s regulatory system," announced February 25.
Per the White House blog, here they are. (Obama’s remarks to the press contained a slightly longer version.)
1. Enforce strict oversight of financial institutions that pose systemic risks.
2. Strengthen markets so they can withstand both system-wide stress and the failure of one or more large institutions.
3. Encourage our financial system to be open and transparent, and to speak in plain language investors can understand.
4. Supervise financial products based on "actual data on how actual people make financial decisions." (The quote is from Obama’s statement, which drew a contrast between "actual data" with "abstract models." Take that, VaR lovers.)
5. Hold market players accountable, starting at the top.
6. Overhaul our regulations so they are comprehensive and free of gaps.
7. Recognize that the challenges we face are global.
Broad reach, lofty goals, and no specifics at all. Though there's one sleeper detail in here: the nod to "plain language" in #3, which is good news. (To see what plain language is all about, click here.)
These principles are so abstract that you can condense them all into a single "principle" that says: “Whaddya say we just go ahead and fix everything that went wrong?”
I’m afraid Congress is going to need a wee bit more guidance if it's going to remake the financial system so we don’t get smacked on the head by a future economic meltdown. On the other hand, it kind of cheers me up to contemplate a future economic meltdown, because that implies that the current one will someday come to an end.
I face my first days on this blog with similar trepidation. Out there in the world of financial re-regulation, everything's already in motion. I'm not sure where and how to jump in, and I'll probably get smacked on the head the moment I do. And every week brings new and exciting developments, like a bunch of Senators wondering which of AIG's regulators did the worst job.
But here goes. Let's start with the very big picture: the Obama administration's seven principles for "transforming the nation’s regulatory system," announced February 25.
Per the White House blog, here they are. (Obama’s remarks to the press contained a slightly longer version.)
1. Enforce strict oversight of financial institutions that pose systemic risks.
2. Strengthen markets so they can withstand both system-wide stress and the failure of one or more large institutions.
3. Encourage our financial system to be open and transparent, and to speak in plain language investors can understand.
4. Supervise financial products based on "actual data on how actual people make financial decisions." (The quote is from Obama’s statement, which drew a contrast between "actual data" with "abstract models." Take that, VaR lovers.)
5. Hold market players accountable, starting at the top.
6. Overhaul our regulations so they are comprehensive and free of gaps.
7. Recognize that the challenges we face are global.
Broad reach, lofty goals, and no specifics at all. Though there's one sleeper detail in here: the nod to "plain language" in #3, which is good news. (To see what plain language is all about, click here.)
These principles are so abstract that you can condense them all into a single "principle" that says: “Whaddya say we just go ahead and fix everything that went wrong?”
I’m afraid Congress is going to need a wee bit more guidance if it's going to remake the financial system so we don’t get smacked on the head by a future economic meltdown. On the other hand, it kind of cheers me up to contemplate a future economic meltdown, because that implies that the current one will someday come to an end.
Posts
