Bernanke Says Financial Rules Need an Overhaul....wonder if he told mr bu$h* the same?

[spanone]

i don't recall ben calling for REGULATION when the shrub ruled .....

The Federal Reserve chairman Ben S. Bernanke on Tuesday called for a broad reworking of how the government regulates the financial system to prevent future financial meltdowns.

In a speech before the Council on Foreign Relations in Washington, Mr. Bernanke said the financial system needed to be regulated “as a whole, in a holistic way” and that stricter oversight of banks would not be enough to guard against future crises.

“Strong and effective regulation and supervision of banking institutions, although necessary for reducing systemic risk, are not sufficient by themselves to achieve this aim,” Mr. Bernanke said.

He said that the failures of government oversight systems and private risk management helped to precipitate the economic crisis by not ensuring that a flood of foreign money into the United States was prudently invested. Credit markets seized up and global economies began contracting in what Mr. Bernanke called the worst financial crisis since the 1930s.

http://www.nytimes.com/2009/03/11/business/economy/11fed.html?hp=&pagewanted=print

[notesdev]

1. The regulations already exist

and Ben Bernanke is near the top of the list of regulators who were DERELICT in their duties.

Bernanke ought to be in jail, or at least, immediately removed from his position.

[PA Democrat]

3. Actually, he is partially correct. There is no regulation of the derivatives market

which played a significant role in the current crisis. In addition, the repeal of Glass Steagall, basically allowed banks to get "too big to fail".

[notesdev]

4. But Bernanke was the regulator for the other side of the trade

He could have, with a simple memo, put a complete stop to the practice of banks putting dog-crap securities in their core reserves. The Fed regulates these banks and their reserves! The Fed deliberately permitted this situation - you can be guaranteed that any 'solution' that comes from those quarters screws you as a citizen and a taxpayer.

[gratuitous]

2. Thank you, Helicopter Ben

So, it turns out the dirty fuckin' hippies who were warning for years about this overextension and overleveraging of the financial markets were right once again.

[blueworld]

5. Oh my goodness, Bravo Ben! Bravo! Forest & Trees! Bravo!

Let me see how it went in NJ - Hmm. Anyone who bought a house with less than 20% down was considered sub-prime. They were required to purchase Private Mortgage Insurance (and add those PMI premiums to their monthly mortgage debt) to PROTECT the bank in case they defaulted on the mortgage.

The banks were allowed to OWN insurance companies since all the regulations were systematically gutted over 20 previous years, so the predatory mortgage lenders required the victims to purchase PMI from their own companies (they're making out like bandits all around but everyone is PROTECTED). :rofl:

The predatory lenders then start gambling under the covers (and out of sight of regulators) with all those premiums, and call them credit default swaps. They "swap" the alleged protection insurance funds with each other in a gambling scheme thereby risking everyone's PROTECTION. The government slumbers. :boring:

Working class folks get screwed when they buy the homes, screwed again when they purchase the PMI, screwed when the financial markets collapse around our ears and screwed yet again by bailing them out.

And so Ben the good wizard realized that something "else" must be done before the derivatives really hit the fan. All the wise Congress elves agreed, except for the GOP goblins, who are banished in the 2010 midterm. The end.