George Soros: The Three Steps To Financial Reform
Perhaps I’m being idealistic but I agree with Soros’ prescription.
Click Here To Read George Soros Recommendation: 3 Steps To Financial Reform
Introduction (Via FT)
The Obama administration is expected on Wednesday to propose a reorganisation of the way we regulate financial markets. I am not an advocate of too much regulation. Having gone too far in deregulating – which contributed to the current crisis – we must resist the temptation to go too far in the opposite direction. While markets are imperfect, regulators are even more so. Not only are they human, they are also bureaucratic and subject to political influences, therefore regulations should be kept to a minimum.
Additional Excerpt (Via FT)
Three principles should guide reform.
-First, since markets are bubble-prone, regulators must accept responsibility for preventing bubbles from growing too big.
-Second, to control asset bubbles it is not enough to control the money supply; we must also control the availability of credit.
-Third, we must reconceptualise the meaning of market risk.
But the efficient market hypothesis is unrealistic.
Markets are subject to imbalances that individual participants may ignore if they think they can liquidate their positions.
Click Here To Read George Soros Recommendation: 3 Steps To Financial Reform
