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Anorak | You can’t regulate the banking system just by regulating the banks

You can’t regulate the banking system just by regulating the banks

by | 9th, May 2013

THOSE Big Bad Bankies, screwed up the entire world economic system and impoverished us all. Of course, what should happen is much greater regulation of what the banksters are doing with or money.

Which might even be true in fact. However, the problem is that you can’t actually regulate the banking system just by regulating the bankers. Because there are all sorts of companies out there that have money and which can and will step in to do business when we prevent banks from doing it .

Hedge funds using debt-trading strategies honed on Wall Street are expanding at a record pace as they profit from risks big banks are no longer taking.

In this case it’s the hedge funds: they’re building up what is called a shadow banking system. One that mimics what the banks do but isn’t subject to the same rules and regulations. Which is something of a problem of course.

If all this banking is now taking place off outside the banks then the people

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Posted: 9th, May 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink