Comments on: It’s the System, Stupid http://www.theroadfromruin.com/2010/04/its-the-system-stupid/ A New Capitalism for a Big Society Mon, 21 Jun 2010 21:05:25 +0000 hourly 1 By: Gyanoprobha http://www.theroadfromruin.com/2010/04/its-the-system-stupid/comment-page-1/#comment-236 Gyanoprobha Sat, 08 May 2010 13:06:12 +0000 http://www.theroadfromruin.com/?p=396#comment-236 Control of systemic risks is supposedly one of the reasons why central banks exist, but you can't have systemic supervision unless the supervisors are independent of the supervised. In the US, you have supervisors who - through the 'revolving door' - are drawn from, and expect to return to, the community of bankers and financial market makers who are supposed to be supervised. The result is a cosy club of cronies united by ties of self-interest rather than an accountable and transparent system. Moreover, the US reliance on self-regulation is designed to undermine any system of regulation, and given legitimacy by lawmakers who pass laws that entrench this cosy system of self-regulation in exchange for financial support for their campaigns from those very bankers. It's the road from ruin to further ruin...until democratic accountability and transparency is restored. Control of systemic risks is supposedly one of the reasons why central banks exist, but you can’t have systemic supervision unless the supervisors are independent of the supervised. In the US, you have supervisors who – through the ‘revolving door’ – are drawn from, and expect to return to, the community of bankers and financial market makers who are supposed to be supervised. The result is a cosy club of cronies united by ties of self-interest rather than an accountable and transparent system. Moreover, the US reliance on self-regulation is designed to undermine any system of regulation, and given legitimacy by lawmakers who pass laws that entrench this cosy system of self-regulation in exchange for financial support for their campaigns from those very bankers. It’s the road from ruin to further ruin…until democratic accountability and transparency is restored.

]]>