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If either party in Washington were to get serious about reining in Wall Street greedheads, here are two good ideas for achieving that.
The first comes from Bernie Sanders, the socialist senator from Vermont who, ironically, has introduced a bill that is the essence of classic capitalism. His bill’s title pretty well sums up its content: The “Too Big to Fail, Too Big to Exist Act.”
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If a financial institution gets so big that its collapse would threaten to bring down the entire banking system or wreck our economy, Sanders’ proposal would require the treasury secretary to break it up – if you’re too big to fail, you’re too big. Period. Rather than the present policy that guarantees a taxpayer bailout for such behemoths, Sanders would cut them into smaller pieces and decentralize their parts to eliminate their threat and increase financial competition. Good for you, Bernie!
Now to England, where bank regulators don’t seem afraid to, you know… regulate. Hector Sants, head of Britain’s Financial Services Authority, has gone to the core of the banking industry’s problem by addressing the culture of executive greed and the lack of ethical accountability. Rather than hiring executives whose primary motivation is to produce huge rewards for themselves, applicants for senior banking jobs are being evaluated for their ability to “set a strong ethical framework” and to foster a marketplace culture that is sensitive to the proper treatment of customers and the larger public.
Already, notes the regulator, the push for a broader sense of responsibility than bankers’ own self-interest has caused a number of applicants to withdraw. Excellent. Good for you, Hector!
Hey, Washington – if you really want a financial system that serves the common good rather than uncommon greed, grab these two ideas and go with them.
“Call It Socialism,” The New York Times, October 9, 2009.
“Regulations Chief Chides British Banks,” The New York Times, October 10, 2009.