Sunday, August 15, 2010

Speaking Sense

Nouriel Roubini has a very simple yet profound article with regards to recovering from the financial mess we are in. First, he states what should be obvious - greed will always be with us. He acknowledges that there are some smart people in the financial world who will spend the time to figure out how to beat the system. Another truth - most CEO's and boards could care less about the stockholders.

His solution has a couple of parts. First, government must intervene in compensation issues more; specifically, bonuses based on the short-term must be verboten. Then, Glass-Steagal or something like it must be restored. Securitization must be drastically curtailed. Third, there are too many conflicts of interest in the way the financial world has worked for the past few years; eliminate or at least minimize them. Finally, make the possibility of loss a reality; forget about 'too big to fail'. Let losers go under.

No comments: