I heard on NPR today a ridiculously apologetic comment that the people who developed these mortgage backed securities were the "rocket scientists" of Wall Street. And that the executives of these financial firms probably didn't understand the securities that the "rocket scientists" created. If this is the case and if we are bailing out the rocket scientists and their managers who didn't understand, then I propose the following regulation in exchange for our potential trillion dollar bailout: If you can't explain the security on a postcard that my mother could understand then its too complex and should not be allowed. Heck, lets apply the same rule to our mortgage loan documents -- 1 page, thats it. If its longer than that its too complicated.
I'm not sure if you're insulting your mother in your post ... but
there are a couple of things to consider:
1. People are signing stuff they don't understand - that's their fault,
not the bankers.
2. Folks that run these banks need to be held acountable, personally
accountable - they should lose their personal assets.
3. The banks have clearly demonstrated they cannot regulate themselves,
and governments have demonstrated they cannot regulate the banks.
We need an NGO with appropriate teeth to regulate banks.
At the end of the day, its about ethics. Our banking system is not
ethical.
trickdick.
Posted by moneybags on September 19, 2008 at 01:48 PM PDT #
The accountability for those leading the banks needs to be clearly visible to the American public. I don't want to know about any more $40M payouts to CEOs who leave their companies in shambles and me with the bill...
Posted by Ambrec on September 19, 2008 at 03:27 PM PDT #
I hope Mom doesn't take it personally.
I like the idea of an NGO. Although wasn't that the theory behind the Federal Reserve?
Posted by Joe Hartley on September 19, 2008 at 03:28 PM PDT #