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> banks seem to have an uncanny ability to destroy themselves in spite of an ever increasing set of regulations That’s the opposite of what is happening. Regul

by CPLX 4y ago

> banks seem to have an uncanny ability to destroy themselves in spite of an ever increasing set of regulations That’s the opposite of what is happening. Regulation has been decreasing.

aikinai 4y ago
Depends heavily on your time scale.
- djbusby 4y ago
  What scale should we use?
  - krastanov 4y ago
    Something between 150 and 300 years seems reasonable.
    - thfuran 4y ago
      That seems way too long to reasonably be considered relevant to modern banking in the US. At one end, it pre-dates this country, and the other still pre-dates the start of the gold standard, let alone its end.
      - kodah 4y ago
        100 years seems reasonable. That would include the gold standard change, some significant monetary changes, and the great depression. I disagree that banking regulation is too much, but I do think the Federal government has an obligation to make regulation implementation easier to implement. We also have some non-sensical banking regulations that continue to victimize sex workers for the sake of it, so I think it's a mixed bag.
  - _heimdall 4y ago
    Well if you go aback 6 years bank regulation decreased, make it 15 years and regulation has increased dramatically. Really you could stretch that back out to 100 years and bank regulation has trended higher, so it'd seem only a very short time scale has regulation decreasing.
bko 4y ago
By what measure has it been decreasing? I never heard of laws being removed or sunsetted just new legislation added on top of existing framework. Maybe some of it counteracts existing laws but the complexity is the problem. Or maybe number of regulators? What was the last time a regulatory agency was disbanded rather than a new one added (e.g. consumer protection bureau). Or number of employees in regulatory bodies, or budgets. Its tough to find a metric that says regulations have decreased. I think the regulations add a false sense of security. If it's highly regulated like the financial industry people just follow the regulations and think that's enough. Investors don't care and assume correctly any mess up at the bank with be bailed out. Less regulated industries tend the have more savvy buyers because you know there won't be a backstop
- deleted 4y ago
  [deleted]
- EFreethought 4y ago
  The Economic Growth, Regulatory Relief, and Consumer Protection Act exempted banks with less than $250 billion in assets from most of the Dodd-Frank Act. They no longer had to have stress tests and it lowered liquidity levels. Under Dodd-Frank, the level was $50 billion. So far all four bank failures that have made headlines recently (Silvergate, Silicon Valley, Signature and now First Republic) were all under the new threshold. I think Silvergate was under the old threshold as well, but that still leaves 3 out of 4 that could have been prevented if Dodd-Frank were left in place. Also: "new legislation added on top of existing framework" can result in less regulation if the new legislation nullifies or repeals or (in this case) exempts some participants from current regulations.

by CPLX 4y ago

> banks seem to have an uncanny ability to destroy themselves in spite of an ever increasing set of regulations That’s the opposite of what is happening. Regulation has been decreasing.

aikinai 4y ago

Depends heavily on your time scale.

djbusby 4y ago
What scale should we use?
- krastanov 4y ago
  Something between 150 and 300 years seems reasonable.
  - thfuran 4y ago
    That seems way too long to reasonably be considered relevant to modern banking in the US. At one end, it pre-dates this country, and the other still pre-dates the start of the gold standard, let alone its end.
    - kodah 4y ago
      100 years seems reasonable. That would include the gold standard change, some significant monetary changes, and the great depression. I disagree that banking regulation is too much, but I do think the Federal government has an obligation to make regulation implementation easier to implement. We also have some non-sensical banking regulations that continue to victimize sex workers for the sake of it, so I think it's a mixed bag.
- _heimdall 4y ago
  Well if you go aback 6 years bank regulation decreased, make it 15 years and regulation has increased dramatically. Really you could stretch that back out to 100 years and bank regulation has trended higher, so it'd seem only a very short time scale has regulation decreasing.

bko 4y ago

By what measure has it been decreasing? I never heard of laws being removed or sunsetted just new legislation added on top of existing framework. Maybe some of it counteracts existing laws but the complexity is the problem. Or maybe number of regulators? What was the last time a regulatory agency was disbanded rather than a new one added (e.g. consumer protection bureau). Or number of employees in regulatory bodies, or budgets. Its tough to find a metric that says regulations have decreased. I think the regulations add a false sense of security. If it's highly regulated like the financial industry people just follow the regulations and think that's enough. Investors don't care and assume correctly any mess up at the bank with be bailed out. Less regulated industries tend the have more savvy buyers because you know there won't be a backstop

deleted 4y ago
[deleted]
EFreethought 4y ago
The Economic Growth, Regulatory Relief, and Consumer Protection Act exempted banks with less than $250 billion in assets from most of the Dodd-Frank Act. They no longer had to have stress tests and it lowered liquidity levels. Under Dodd-Frank, the level was $50 billion. So far all four bank failures that have made headlines recently (Silvergate, Silicon Valley, Signature and now First Republic) were all under the new threshold. I think Silvergate was under the old threshold as well, but that still leaves 3 out of 4 that could have been prevented if Dodd-Frank were left in place. Also: "new legislation added on top of existing framework" can result in less regulation if the new legislation nullifies or repeals or (in this case) exempts some participants from current regulations.