Wednesday, March 18, 2009

Paulson Calls for "New Regulatory Architecture"

The wolf wants to design the hen house.

The former Treasury Secretary writes:

First, this will be a big, multi-year undertaking. The crisis has exposed serious flaws in many aspects of our financial system. There will be proposals for more effective regulations in areas ranging from over-the-counter derivatives and short selling, to the practices of financial institutions, investors, mortgage originators and credit rating agencies. We will need to reflect on the long-held premise that sophisticated investors have the wherewithal to look out for themselves and require minimal, if any, supervision.
Again how is it that government supervisors have superior vision?


  1. No mention of over-leverage as a problem that needs to be fixed. Maybe that's because Paulson successfully lobbied the SEC in 2004 to remove the 12:1 leverage limitations on large broker/dealers.

  2. Paulson as always is hazy on details. He has one plan: to put money in his pocket and that of his crony buddies.