JK
Sep 02, 2009
Systemic risk;
Most systems comprise a large number of individual and independent entities.
Systemic risk occurs when there is:
a reduction in entities
a lessening of independence (of their behaviour)
A regulator should be aware of both.
Its regulation of indiosyncratic risk should be balanced against systemic awareness.
Thus we reach an odd conclusion:
Reduced competition barriers
Allowance of differing risk constructions
The true regulation requirement:
Making experts educate, not obfuscate.
Tony Frank
Jun 05, 2009
Why don't we abolish all accounting rules and regulation. After all, the wall street thieves can't be stopped and will continue to rape and pillage.
Might as well save the taxpayers the additional expense that could be used for the next thief bailout.
David Thayer
Jun 04, 2009
When have regulated entities proven themselves to be less subject to risk than non-regulated entities? How can we be assured that the volumes of information gathered will be effectively analyzed by regulatory bodies? Will the cost of abiding by new and potentially burdensome regulation ever be factored into the headlong rush toward such regulation?
Experience has shown that regulation does little to minimize risk and great deal to impede the efficient allocation of resources. To cite but one example, among hedge fund frauds, far more of these funds have been registered with the SEC than not. Regulation provides a veneer of oversight to an industry, whereas such oversight rarely exists. Investors and other capital market participants have plenty of financial incentive themselves to perform their own due diligence without the mock oversight of regulatory bodies.
