Tuesday, April 27, 2010
Mortgage Deals Under Scrutiny as Goldman Faces Senators
Should the banks be regulated? If so, where do we start? What regulations are of primary importance. If no regulation is necessary, then.....tell me what you are thinking?
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Banks definitely should have some regulation. Though people may say that is anti-capitalist, I believe that our government/country relies so heavily on banking institutions that it is almost a necessity to ensure their success, and the successes of their customers.
ReplyDeleteWith this said, I feel it is wrong for banks to purposely set "traps" which lure potential customers into poor situations. This would be akin to cigarette companies selling their product and advertising it as the best thing for your health since exercise. There need to be clear guidelines laid out these investments are risky or poor. This would probably eliminate them altogether as this would cause a sharp decrease in demand.
For banks, I believe the most important regulation is the reserve requirement. I feel that a higher reserve requirement than our current one. It's scary that you need to ask in advance for over $3,000!
There definitely needs to be some regulation amongst the banks. If not, then we'd see even crazier interest rates (39%!!) and a complete change in the way money is handled. Banks are a 'necessary evil,' as some would say, but just because they are necessary does not mean that they should go unregulated. Piggy-backing on what Erika mentioned... I feel the same way about luring customers into situations that leave them in crappy situations. This reminds me of the The Insider, where the corporations knowingly puts out a harmful product, and refuses to rectify their wrongdoing.
ReplyDeleteWhere do regulations start? Probably in the amount of loans banks can make and their reserves. Regulating these would alter their interest rates and discount rates etc. that are the driving forces in our economy.
I'd have to say that banks need some kind of regulation, because we've tried the deregulating and the honor system, and clearly that isn't going over so well.
ReplyDeleteTo start, someone needs to be looking at the types of loans that are being offered and who they're being offered to.
Some people just shouldn't be getting loans when they do, and other people deserve loans when they're getting denied.
And geez, there should be someone, somewhere, who is looking at the market and the things people can invest their money in and be able to say, oh look, that's going to screw a lot of people, we shouldn't have this option available.
That's a whole job position that can be created!
I think that banks should be regulated. Even though it is not capitalist, it would be better for the country and economy. We need to start with how loans are being distributed. When someone goes to get a loan there should be a more thorough background check and then only give them the amount that they can afford. The banks should not be giving out as much money that they are, that they know they won’t get back because of the inflation rate. We should also have higher reserve requirements. If someone has a large amount of money and they want to take it out to buy something, which would be stimulating the economy; but the banks now need at least a three day notice which stops people from buying.
ReplyDeleteI do believe that need to start giving some regulation to banks. To need to make sure that banks aren't just giving loans out for no reason, we need to make sure that loans are being distributed correctly. If we do not start some form of regulation we will soon see, as Giovanni put it, "crazy" events with wild interest rates flying through the roof.
ReplyDeleteLeave the banks alone...the government can not control and watch over everything. Let the banks take their route, without the government having to put their two sense in there.
ReplyDeleteThere does need to be some regulation. Lending money out of control is no good. I agree with Christina that we need to crack down more on choosing who gets loans; some people should not. The reserve requirement should be higher, and not as much should be lent out. Giancarlo is right too. Interest rates are climbing, and we cannot take it anymore. Regulation is very important, and plans to regulate should be put into action!
ReplyDeleteI feel like to provide my full opinion would be utterly redundant of what everyone else has said because, for the most part, I find myself agreeing with them, and my own thoughts and ideas incorporated into their arguments. I do have one abstract proposal, though: maybe a concrete regulation would be to put a cap on shorting in the stock market. It's seems like a wild contradiction to the fundamental nature of the stock market- that it should go unregulated- but I think putting a cap on the amount of overall shorting allowed in the market would allow for a a consolidation of the best companies to rise to the top. A short term capitalistic cycle, if you will.
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