Posted: Tue Oct 04, 2011 8:21 am Post subject: American Banks, Wall Street, Canadian Banks & Regulation
Canada is in better shape, for now, since our banks are reasonably solid and regulated. Some Libertarians would rather have less regulation, more openess, more freedom. I prefer that to a point. When those holding your money play with it for bigger returns and bonuses, which could risk ones life-savings, I tend to think regulation is wise.
The progressives , mainly the democrats and bureaucrats, were the cause of the American and world wide financial crisis. And those deeply involved were bailed out, with taxpayers money. Republican George W. Bush and his father, did not pay enough attention to the economy.
Mind you, the American political system is different than ours since congress and the senate have clout, even one senator can prevent things unless there's a super-majority.
The following is from the Financial Post stated by Sheila Bair, former chairman of the U.S. Federal Deposit Insurance Corp. (FDIC):
"....the controversial bank bailouts cast a long shadow. "Canada didn't get anywhere near the kind of problems we had in the U.S., and good for you. But I don't want to see bailouts again. It is state capitalism and there is no way around it. I'm a capitalist, and I don't think capital markets work unless people will have to suffer the consequences of their own risk taking."You set up a system where the private interests can capture all the gains, the profits from risk-taking, but then the taxpayers take the losses when things go bad. That is not capitalism.
"Capitalism won't work, you will skew allocation of resources to higher risk activities. Financial services got too big, and I think that one of the reasons is too big to fail."
Those "too big to fail" financial institutions grew so large that investors bet the government would have no choice but to bail them out. "You know what, that turned out to be right."
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American Banks, Wall Street, Canadian Banks & Regulation