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Activity:
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last activity : 07 06 2010 20:18:09 +0000
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Regulators
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Heads of All States
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Fannie Mae and Freddie Mac
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Banks and mortgage lenders
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Everybody
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All major countries had regulators for banking, insurance and financial/ stock markets. These were asleep at the wheel. No insurance regulator sought to check the runaway growth of the CDS market, or impose normal regulatory checks like capital adequacy. No financial regulator saw or checked the inherent risks in complex derivatives. Leftists today demand more regulations, but these will not thwart the next crisis if regulators stay asleep.
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Yes, I would say that regulators did not take care of their responsibilities by not imposing some corrective measures to avoid the collapse of the global economies.
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Blaming parts of the administration would not bring out the right answer. The responsibility lies squarely on the shoulders of the Heads of stead who run the administration with their own set of advisors and follow a growth & control strategy path. Their administrative machinery consists of regulators for economic, fiscal and market policies and other statutory bodies for audit systems,who are accountable to protect financial and physical investment of belonging to the global public. Like Fareed Zakaria suggested, there should be a global authority, like G-20 to plan global policies and regulatory systems on a sitting on a space shuttle for the entire globe, within which all the sovereign states including USA, Russia, European Union, Japan, India, China, etc, should frame their own internal administrative policies. |
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They resisted regulation, and spent over $2 million lobbying legislators against any tightening of rules. As mortgages of last resort they should have been especially prudent. But they bought stacks of toxic mortgage paper — collateralize debt obligations (CDOs) — seeking short-term profits that ultimately led to bankruptcy.
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Instead of keeping mortgages on their own books, lenders packaged these into securities and sold them. So, they no longer had incentives to thoroughly check the creditworthiness of borrowers. Lending norms were constantly eased. Ultimately, banks were giving loans to people with no verification of income, jobs or assets. Some banks offered teaser loans — low starting interest rates, which reset at much higher levels in later years — to lure unsuspecting borrowers.
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Consumers, corporations, banks, politicians, the media — indeed everybody — was happy when housing prices boomed, stock markets boomed, and credit became cheap and easily available. Bubbles in all these areas grew in full public view. They were highlighted by analysts, but nobody wanted to stop the lovely party. Everybody liked easy money and rising asset prices. This trumped prudence across countries.
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in favour of reservation vs apposing reservation |
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The time which we are saying now looks similar to dot com bubble. Will 2009 be seen as mirror image of 2001-03? |
Ramalinga Raju has many split bank accounts. Do you really think that govt. was unaware of it? |
Are the announced cut in excise and service tax enough according to the current situation? |