The first comes from a piece by Yves Smith in which he quotes at length from another piece by Willem Buiter which argues that we should embrace active re-regulation now, risk over-regulation, rather than waiting to get it right. (Notice how this ties in well with the Geithner quote below? That's continuity, folks). First Yves:
Given the considerable costs [financial] innovation hath wrought, the calls
to shackle bankers seem completely warranted. If any other class had done this
much damage, they'd almost certainly be in jail.
Then a few more great lines from Buiter:
Self-regulation is to regulation as self-importance is to importance. The
notion that markets, including financial markets could be self-regulating, by
properly incentivising CEOs and Boards of Directors and through
market-discipline, is prima facie suspect. We decide to regulate markets because
of market failure. Then we let the market regulate the market. This is an
invisible hand too far.
The European political leadership seems to agree, and their agenda at the upcoming G20 is going to reflect this fact. Hold on to yer hats: the winds of regulation is blowin'.
