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One Blog-Poster’s Solution to the Current Mess January 19, 2008

Posted by davidzweig in economics.
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The Big Picture | iBank Writedowns = $100 Billion Annotated

* Shut down every bank that is below capital levels, I mean now; The OCC is permitting zombie banks a la Japan as we speak;
* Create a unified GSE/Bank regulator; put hedge funds under the control of that regulator;
* Bring all swaps & CDS onto regulated exchanges;
* Replace issuer-paid rating system with an investor-paid rating system, since the investors seem to have outsourced their credit analysis to the rating agencies anyway;
* Prosecute Sarbanes-Oxley violations to the full extent of the law;
* Reinstitute Glass-Steagall: prohibit dealers from lending and lenders from distributing;
* Replace the Federal Reserve leadership since they saw fit to ignore their congressional mandate to regulate non-depository mortgage lenders;
* Replace the SEC & Justice Department leadership that has gone into hiding the last 8 years.
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