Monday, July 19, 2010
It’s the Nature of Capitalism: Regulations Can Fix a Crisis, but Won’t Prevent One
From University of Arkansas, Fayetteville
“The Restoring Financial Stability Act of 2010 includes many features that will strengthen a federal regulatory system that for many years really hasn’t subjected Wall Street to intense oversight,” says banking expert Tim Yeager, associate professor of finance at the University of Arkansas and former economist at the Federal Reserve Bank of St. Louis.
“But the new law will not prevent another financial crisis. The very nature of the capitalist system makes it nearly impossible for legislators and regulators to accomplish this,” Yeager said.
The new bill, a response to the banking and subsequent credit crisis of 2008, which pushed the U.S. economy into recession, creates stronger federal oversight of financial companies. The bill also calls for a consumer protection regulator and a panel to detect risks to the financial system.
Read the full article here.
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