On Financial Reforms, Obama Is No FDR

Krugman, Pearlstein agree: It doesn't address key problems

(NEWSER) - Barack Obama knows what caused the financial crisis, but his regulatory plan “basically punts on the question of how to keep it from happening all over again,” writes Paul Krugman in the New York Times. Obama’s plan takes the crucial step of regulating the “shadow banking” system, giving the Fed power over any systemically important institution. But it wouldn’t touch executive compensation or the ratings agencies, both of which played major roles in the crisis. More»

(NEWSER) - President Obama visited Wall Street’s historic Federal Hall today, on the anniversary of Lehman Brothers' collapse, to make the case for the financial regulatory reforms wending their way through Congress. He spoke of the need for “strong rules of the road” for the financial system. “History cannot be allowed to repeat itself,” he said, calling the effort “the most ambitious overhaul of the financial regulatory system since the Great Depression.” More»

Oversight measures aim for 'minimum' to avoid meltdown

(NEWSER) - Today Barack Obama will announce a major financial reform package that will give the Fed, Treasury, and FDIC new powers of regulation and oversight. It's the most substantial shift in financial regulations since the 1930s—but stops short of some of the most radical proposals, including tough limits on derivatives trading. In an interview with the Wall Street Journal, the president says he wants a "relatively light touch," but that Washington needs to "guard against huge systemic risk." More»

(NEWSER) - During the Great Depression, legend has it a group of Wall Street bankers went to Hollywood to see if it was worth investing in, only to be immediately repulsed by the brazen displays of wealth they saw there. Now that it's the bankers being pilloried for their excesses, writes Neal Gabler in the Boston Globe, it could be argued that the whole economic mess we're in is the result of once-stodgy Wall Street becoming Hollywoodized. More»

Loophole lets Madoff types profit from bad advice, they say

(NEWSER) - Wall Street advisers and brokers are tussling over the details of a looming regulatory overhaul as Washington takes steps to prevent another Bernard Madoff scandal, Bloomberg reports. Advisers want brokers who counsel clients to be subject to the same oversight they’re under; currently, their brokerage counterparts can profit by swaying customers to buy their firm’s own financial offerings, even if they’re a bad risk. More»