Tuesday, March 17, 2009

The March of Fascism: Rep. Frank: Systemic Risk Regulator Will Be Able To Say To Any Entity, ‘No You Can’t Do That’

From the Wonk Room:

Committee chairman Barney Frank (D-MA) has been outspoken in his desire to see a systemic risk regulator — most likely the Federal Reserve — that would oversee all activity, across the spectrum of financial institutions, and flag behavior that is threatening to the entire system (like that undertaken by, oh, AIG).

Frank sat down with ThinkProgress today to explain his vision for the regulator and why the role should be filled by the Federal Reserve:

And what we mean by it is somebody who is able to say to any entity that is engaged in financial activity, ‘no you can’t do that in that degree. You are way over leveraged. You don’t have enough capital.’ […] Now I said, any entity. People said ‘well, are they going to regulate hedge funds or private equity?’ The answer is yes, all of the above. If you tell them to regulate this, that, and the other institution, I guarantee you that within a month there will be a new institution that’s outside the statute. So they will regulate activity.
As I have said before, I have yet to see Representative Frank explain why he thinks the Fed will know what the right moves for the economy should be, given that at the peak of the housing bubble, the New York Fed's top economists put out a report stating there was no housing bubble.

1 comment:

  1. The Fed's already turning the screws on SocGen for alleged AML violations. See the Written Agreement dated today.