Except that Glass-Steagall had almost nothing to do with the problem and its repeal allowed some of the measures used to try to save things (namely banks buying failing investment houses).
The crash was caused by govt trying to get people to buy houses that said people could not afford. There were tons of regulations aimed at that end and they all contributed. Yes, that includes CDOs.
Regulation is systemic risk.
And for those folks who think that "too big to fail" is a problem, what does "too big to fail" tell us about the Federal Reserve?
And for folks who think that incentives and "skin in the game" matter, what are regulators' incentives and what skin do they have in the game? Have any regulators lost their jobs over the financial crash? (The closest is Chris Dodd, but Barney Frank will be re-elected.)
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Except that Glass-Steagall had almost nothing to do with the problem and its repeal allowed some of the measures used to try to save things (namely banks buying failing investment houses).
The crash was caused by govt trying to get people to buy houses that said people could not afford. There were tons of regulations aimed at that end and they all contributed. Yes, that includes CDOs.
Regulation is systemic risk.
And for those folks who think that "too big to fail" is a problem, what does "too big to fail" tell us about the Federal Reserve?
And for folks who think that incentives and "skin in the game" matter, what are regulators' incentives and what skin do they have in the game? Have any regulators lost their jobs over the financial crash? (The closest is Chris Dodd, but Barney Frank will be re-elected.)