Monday, July 19, 2010

Financial Crisis Inquiry Member: FinReg Will Be 'Disastrous' for Economy

Peter Wallison gets it.

Wallison, a member of the Financial Crisis Inquiry Commission, said on CNBC this morning that:

[The new financial "reform" bill] is Obamacare for the financial industry. Basically the government is taking control of the financial industry...The Fed can take over any company that the regulators believe is systemically important…When the Fed does take control of any of these institutions, it controls their activities, their leverage, their liquidity, their capital, so what we are creating really is a partnership between probably the largest financial companies in this country and the government. If that isn’t control of the financial industry, I don’t imagine what could be...

Regulation will impose tremendous costs on the financial industry, and consumers will feel those costs as will anyone who needs credit. As a result, we’ll have less credit around, less financial growth and less innovation.

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