Comments
PwC Faces Suspension, Fine From New York Regulator
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Byurcan
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Byurcan,
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8/20/2014 | 5:00:04 PM
Re: Regulatory Problems
The finger can always be pointed at the Fed, when banks (and governments) know they have an elastic money supply, they can be less cautious with their money and make more risky, ill-advised investments when the Fed can just make more money for them to spend or be bailed out by. This then creates inflation, which drives down the value of the dollar, which hurts people like you and me and 90% of low-to-middle class America as our savings is worth less, since the dollar is worth less. I have lots of material from prominent economists throughout the past century about the evils of central abnking if anyone is inetrested in learning more. 


Disillusion with the Fed is very widspread in this country and crosses the political spectrum. That's why you'll see both hippies at Occupy gatherings and those at Tea Party gatherings sporting "End the Fed" signs.
KBurger
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KBurger,
User Rank: Author
8/20/2014 | 4:49:32 PM
Re: Regulatory Problems
Ah, the old "moral hazard" argument! Well, I think that's valid, although I don't know that I would point the finger at the Fed as the villain here.
Byurcan
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Byurcan,
User Rank: Author
8/20/2014 | 4:46:22 PM
Re: Regulatory Problems
Nothing to do with regulation, but the fact that banks know there is a bail-out for them. So if they do business with risky players, it doesn't matter, the Fed will create more money, and the government will bail them out.
KBurger
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KBurger,
User Rank: Author
8/20/2014 | 2:53:09 PM
Re: Regulatory Problems
Umm, what does that have to do with anti-money-laundering requirements? Please don't tell me that regulation is forcing banks to do business with bad players.
Byurcan
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Byurcan,
User Rank: Author
8/18/2014 | 12:52:08 PM
Re: Regulatory Problems
Well I don't mean just regulation, I'm talking the whole thing. Mainly the Fed's ability to create money whenever it wishes, which thus allows banks to take risks they normally would not if they didn't know that they have a backup that will bail them out, i.e. the federal government, and it's money-creating arm, the Federal Reserve.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
8/18/2014 | 12:49:29 PM
Re: Regulatory Problems
Yes that's what I was getting at. There needs to be changes in the way banks are regulated, not just how much they are.
Byurcan
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Byurcan,
User Rank: Author
8/18/2014 | 12:47:14 PM
Re: Regulatory Problems
I don't believe the problem is the typical more v less regulation battle, but rather a complete dismantling and overhauling of the entire current financial system. But that's a lenghtier discussion for another forum.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
8/18/2014 | 12:43:48 PM
Regulatory Problems
As much heat as banks get today publicly, our regulatory framework needs a lot of work, and this story shows that the holes in it extend beyond the regulatory agencies themselves. I think it's easy to say that regulators need to be more skeptical towards the industry in light of this incident (and all the others over the last few years), but that will require serious reform of the regulatory agencies. And I don't think anybody is pushing for that given all the change already happening in regulation.


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