The Financial Regulation Law: Why It’s Unneeded

This is Richard Posner, writing at his blog:

It’s a monstrosity, and a gratuitous one, as there is no urgency about legislating financial regulatory reform. The financial regulatory agencies have ample, indeed essentially plenary, authority over the financial industry; and because they were asleep at the switch when disaster struck, they are now hyper-alert to prevent a repetition of it. Indeed, bank examiners have become so fearful of condoning risky banking practices that they are making it difficult for banks to lend to small businesses and consumers and thus are retarding the economic recovery.

Comments (6)

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  1. Tom H. says:

    Excellent pont. And one that I think was made recently in an NCPA Brief Analysis. I haven’t seen the point made anywhere else, however.

  2. Joe S. says:

    Agree totally. What is about to happen is unnecessary and stupid.

  3. Larry C. says:

    Interesting. This is something I did not know.

  4. Bruce says:

    What this administration wants is discretionary power, which it would like to use to reward friends and punish enemies.

  5. Virginia says:

    I was reading something last night that talked about how the banking regulations enacted in the 1930’s caused business to delay any big projects due to uncertainty about regulatory intervention. It delayed the economic recovery because everyone was holding onto cash instead of investing it.

  6. p r barriball says:

    The Frank-n-Dodd legislative creation that is being brought to life is another 2,000+ page piece of legislation (adding to the ever growing monument to man’s canonical and unfathomable legislative fervor) that merely provides an assortment of mis-sized band aids to patch up the financial industry’s ailing framework in our country. It leaves out large pieces of the framework’s foundation stones while hitting hardest at the banking community at large. And generating an even greater threat to future stability with its wide discretion given to a “broad range of regulators” to write rules, proposed 13 new bank agencies as well as its 150 government studies!