Revisiting Financial Regulation

Triple Crisis Blogger C.P. Chandrasekhar originally published this post on the IDEAs Network.

Don Kohn, deputy to former Federal Reserve Chairman Alan Greenspan at the time when the financial crisis broke, has won himself an unexpected and unusual job. He has been appointed to a new committee which has the mandate to guide the United Kingdom (note not the US) to financial stability. Speaking to British MPs at a confirmation hearing he chose to confess his guilt. According to the Financial Times (May 17, 2011) , he said: ”I deeply regret the pain that was caused to millions of people in the US and around the world by the financial crisis … Most of the blame should be on the private sector: the people that bought and sold those securities, on the credit rating agencies that rated them. But I also agree that the cops weren’t on the beat. The regulators were not as alert to the risks as they could have been and, to the extent they saw the risks, were not as forceful in bringing them to the attention of management, or taking actions, as they could have been.”

Read the full post at the IDEAs Network website.