Tuesday, June 30, 2009

New financial industry rules are self-defeating

In a recent letter to the Boston Herald, BHI Koch Summer Fellow Andrew Dabrowski thinks more rules don't make for better rules.
The Herald’s criticism of the new financial regulation package simply fails to go far enough (“Regulation history,” June 21). Suffice to say, there are many, many new rules, and very few of them will do anything substantial.

Does anyone really believe that the same tired government agencies will be able to manage ever more responsibility? Far from helping the American consumer, these new regulations will further restrict banking activity. Putting the brakes on the financial industry should be the last thing the economy needs. Obama’s regulation will fail to modernize the financial regulatory system, leaving it open to future disaster.

Ideally, the new rules should have centralized regulation by eliminating the legions of individual regulators. I don’t necessarily argue for a single agency, but rather for fewer, more effective institutions.

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