What do you guys think Greenspans comments on revamping bank regulation? This article in bloomberg references opinions by Alan Greenspan, who makes some interesting points.
I am no economist, which is why I think it would be interesting to hear what some of you who have been around a while have to say about some of this stuff.
One, hey says:
Will this slow the rate at which money is created in the fractional reserve system, by increasing the fraction of the "reserve"? And if that is the case, would that potentially cause an increase in demand for money, not necessarily by a customer but by the bank itself? What impact would that have on interest rates, inflation, etc?
Also, he says:
I dont know much about this, but found the quote thought stimulating.
Finally, and this I found most interesting:
Kind of a glim outlook. Are there areas of economics, or of Fed reserve banking specifically, that we do not know enough about? His comment above seems to make the assumption that the tools we have are all we are ever going to have, and therefore we cannot solve the problem of bubble popping, only lessen thier negative impact.
Anyone have any thoughts?
I am no economist, which is why I think it would be interesting to hear what some of you who have been around a while have to say about some of this stuff.
One, hey says:
Quoting Alan GreenspanDislikedBanks may need to hold capital equal to 14 percent of their assets, compared with about 10 percent in mid-2007 before the financial crisisIgnored
Also, he says:
Quoting Alan GreenspanDislikedCapital and liquidity, in my experience, address almost all of the financial-regulatory structure shortcomings exposed by the onset of crisis. Moreover, capital has the regulatory advantage of not having to forecast which particular financial products are about to turn toxic.Ignored
Finally, and this I found most interesting:
Quoting Alan GreenspanDislikedUnless there is a societal choice to abandon dynamic markets and leverage for some form of central planning, I fear that preventing bubbles will in the end turn out to be infeasible. Assuaging their aftermath seems the best we can hope for.Ignored
Anyone have any thoughts?
All I ask for is a chance to prove that money cannot make me happy.