Monday, June 28, 2010

Financial regulatory reform

Financial Times:

[C]ompleting financial regulatory reform is less a final victory than an opening shot in a long struggle. Regulators will now have the authority to keep banks on a tight leash. But authority to act is not the same as action, and it will be up to regulators to wield their newly won powers. This they will only do effectively if other countries do the same, and if regulators everywhere have political backing to make enemies of the banks.

It is instructive that the United States required financial regulatory reform in order that regulators might enjoy the "authority to act." But as the Financial Times points out, such authority is contingent upon "political backing," which in a society of depoliticized consumers means some portion of the business community will have to endorse it vis-a-vis the banks.

Here we speak of the difference between the banks running the economy more or less unchallenged, and some kind of negotiation between different business sectors on what the rules will be. The public is understood to be out of the picture altogether, saddled as they are with ever-longer hours and increased costs in getting from day to day.

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