Why Bankers Need to Be Put Into Little Boxes

[xchrom]

http://blogs.hbr.org/fox/2011/06/why-bankers-need-to-be-put-int.html

There's a beguiling little moment in the financial-crisis documentary Inside Job where hedge fund billionaire George Soros describes the principles of oil tanker design. If a tanker consisted of one big tank of oil, the sloshing liquid would soon capsize the vessel, Soros explains. So tankers are comprised of lots of smaller, separate tanks, which keeps the sloshing in check and the ships afloat.

Financial markets are like that, Soros goes on. If they're compartmentalized, the risk of crisis is much lower than if all sorts of financial products and institutions are allowed to mix together in a giant sloshfest.

It's a nice analogy. That doesn't mean it perfectly describes the workings of financial markets (it's an analogy), but it certainly gets at some aspects not hinted at in the general equilibrium model that long dominated financial economics — in which more "complete" and intertwined financial markets are supposed to lead to better economic outcomes. To mainstream economists the Glass-Steagall Act that separated the banking and securities industries looked like a competition-restricting, innovation-damping anachronism. To those knowledgeable about oil tankers, its repeal in 1999 must have been far more disturbing.

[Skink]

1. At the moment they are working on a super Collosal tanker.

[Donnachaidh]

2. they were at one time -- before the deregulation traitors stepped up

Then both parties decided to work for the wealthy and we got screwed in the process.

[xchrom]

3. +1

[The Magistrate]

4. Good Article, Sir, But Rather a Disappointment After the Visions Conjured By the Headline....

"Anyone for veal?"

[xchrom]

5. yeah -- i had a different thought my self when i first read that.

'pardon me sir -- but do you have any gray poupon -- to go with my bankster sandwich?"

[Demeter]

8. I was thinking: "6 feet under!"

[femrap]

6. I was thinking of

putting them in little cages.

[ChazInAz]

7. Verily.

Thus enabling us to better keep an eye on them.

[saras]

9. Good but irrelevant - they've already stole the oil, they're taking the boat apart now

[txlibdem]

10. Supertanker + banksters + stock/hedge fund fraudsters + ripoff loan people + huge iceberg

Whoops!

Problems solved!

:hi:

[eridani]

11. I'd prefer to put them in tumbrils, myself n/t

[jtuck004]

12. FEMA Trailers.

In a prison courtyard.

[yurbud]

13. little boxes with no air holes, filled with rocks and thrown off a bridge.