I’m going to keep this summary of the Roosevelt Institute report and guides, all the interviews and the major posts “sticked” to the top of this page while financial reform is running, to be used as a resource for all (I’ll update it as needed):
Roosevelt Institute Resources
As Rob Johnson points out in his excellent American Prospect article on financial reform, it’s surprising how much consensus there was in the 2000s on what big things need to move in regulation:
On this point, there is a clear consensus among experts at the Bank for International Settlements and the Financial Stability Board, though not within the U.S. Congress. Reform of “too big to fail,” at minimum, would include systems for resolution of failed financial companies that are harmonized internationally; a vast increase in the capacity of regulators to assess the real-time condition of large, complex institutions; exposure limits on cross-firm asset-holding to deter contagion; and derivatives reform so that balance sheets can be understood and monitored.
A simple menu of what we need includes:
– Derivatives reform;
– Off-balance-sheet reform;
– Rating-agency reform;
– Restructuring of housing finance;
– Separation of risky activities from the financial safety net;
– Separation of activities that have inherent conflicts of interest within a firm;
– Legal resolution powers for large failed institutions, with consistent cross-border standards;
– Significant increase in resources and salaries for supervision, examination, and regulation;
– Consumer financial protection.
Will we get those from this bill? Some yes, some sort of, and some no. Will there be a cultural change, either on the regulatory side or the Wall Street side? Definitely not for the second, and we’ll see on the first. And will this simply be use returning to the financial sector of 2005-2007 with some additional regulatory powers? I certainly hope not, but we’ll see.
Here’s what I tell myself: it took 30 years to take apart the fragile financial regulations and norms the New Deal and the mid-century crew put together to create a financial sector that works to build a broad-based prosperity for everyone. We aren’t going to rebuild that overnight.