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Working in finance myself, I totally agree with you on the regulators lint. Everyone arguing regulators are evil is genuinely tech and finance savvy. The regula

Working in finance myself, I totally agree with you on the regulators lint. Everyone arguing regulators are evil is genuinely tech and finance savvy. The regulator is not there to protect them. They are there to protect the vast majority - not only from the outright criminals but also the slightly evil financial services companies (see the Wonga and payday loans debacle in the UK). Say what you like about regulators - and they regularly mess up big - but they ensure that 99% of consumer finance companies have the cash to back up deposits because they are forced to! We don't necessarily need more regulation, but more of the right regulation would be good.

solveit 5y ago
> Everyone arguing regulators are evil is genuinely tech and finance savvy. The regulator is not there to protect them. They are there to protect the vast majority I agree. But a funny thing I wanted to remark on is that this dynamic makes defi (and any other esoterica) better (or less worse, depending on your POV) than it "deserves" to be. It essentially functions as a less-regulated side track for those savvy enough to use it, and this self-selecting population is one that does not need as much regulation as the general population. Of course, this is until defi gets packaged into nice, consumer-friendly products you can buy with a couple of swipes, which is already happening.
- ErrantX 5y ago
  Well yes true. Arguably the whole NFT thing is an example of that already. But I get your point; it is reasonable for savvy people to have a play ground for more risk.
tcgv 5y ago
I agree that regulation can and should be a good thing, to protect the participants of the financial system. But in the past decades we've seen a (lobbied) shift towards deregulation, with catastrophic results: > Say what you like about regulators - and they regularly mess up big - but they ensure that 99% of consumer finance companies have the cash to back up deposits because they are forced to! In the 2008 subprime mortgage crisis not long ago the US government was forced to bail out several banks, basically transferring the cost of that mess to tax payers, so I disagree with this statement.
- dkasper 5y ago
  I think you're missing a key point that because of the 2008 crisis the regulations were updated. Bank reserves are higher now than pre-2008. So in fact this is basically like the OP said, regulators regularly mess up, and then update the regulation.
  - lupire 5y ago
    IIRC the Fed is currently removing reserve requirementa because they don't believe they are useful. Banks have reserves now because the government printed so much money to give them that they can't put it to any use.

solveit 5y ago

> Everyone arguing regulators are evil is genuinely tech and finance savvy. The regulator is not there to protect them. They are there to protect the vast majority I agree. But a funny thing I wanted to remark on is that this dynamic makes defi (and any other esoterica) better (or less worse, depending on your POV) than it "deserves" to be. It essentially functions as a less-regulated side track for those savvy enough to use it, and this self-selecting population is one that does not need as much regulation as the general population. Of course, this is until defi gets packaged into nice, consumer-friendly products you can buy with a couple of swipes, which is already happening.

ErrantX 5y ago
Well yes true. Arguably the whole NFT thing is an example of that already. But I get your point; it is reasonable for savvy people to have a play ground for more risk.

tcgv 5y ago

I agree that regulation can and should be a good thing, to protect the participants of the financial system. But in the past decades we've seen a (lobbied) shift towards deregulation, with catastrophic results: > Say what you like about regulators - and they regularly mess up big - but they ensure that 99% of consumer finance companies have the cash to back up deposits because they are forced to! In the 2008 subprime mortgage crisis not long ago the US government was forced to bail out several banks, basically transferring the cost of that mess to tax payers, so I disagree with this statement.

dkasper 5y ago
I think you're missing a key point that because of the 2008 crisis the regulations were updated. Bank reserves are higher now than pre-2008. So in fact this is basically like the OP said, regulators regularly mess up, and then update the regulation.
- lupire 5y ago
  IIRC the Fed is currently removing reserve requirementa because they don't believe they are useful. Banks have reserves now because the government printed so much money to give them that they can't put it to any use.