November 23, 2010
Readers of this blog will know that financialguy is not 100% convinced that additional rules in high-finance will really help the financial system. It is fair to say that things like capital funding rules will probably be beneficial, even if they don’t go far enough.
However, it has long seemed to me that enforcement will be a better path to take than rule making. Of course, politicians make rules as a job, so that is what they will do, but there are already are lots of rules about finance.
This story from the United States shows what might prove to be more useful:
The threat of prison, especially for a ‘Master of the Universe’ must be pretty terrifying. These are not ‘tough guys’ with big biceps that will survive well in an American prison, they are ‘quants’ with big brains and a taste for the finer things in life.
So I ask, what would work better to reign in many of the excesses of the financial sector that put so much of society at risk? More rules? Or more policemen?
(If you are new to this topic, this story also on Huff Post will explain a little of the background).financialguy