Reply #20: Financial Reforms 'Cosmetic,' Won't Stop More Crises: Roubini [View All]

[slipslidingaway]

comments from May and June

http://www.cnbc.com/id/37219897

"Current efforts to reform financial regulation are “cosmetic” and won’t prevent another crisis, economist Nouriel Roubini told an audience on Tuesday at the London School of Economics.

“The way I think about this crisis is not in terms of black swans (a sudden, rare event), but white swan events," Roubini said. "Crises are much more common than we think.”

“We need more radical reforms," he added. "The idea that we’ll be able to close down an institution like Goldman (Sachs) in an orderly way — a business that operates in nearly a hundred countries — is absurd.”


http://nourielroubini.blogspot.com/2010/06/financial-reform-bill-goes-in-right.html

"Nouriel Roubini: In my view, the financial reform bill goes in the right direction in terms of what needs to be done, but it doesn't go far enough in a number of dimensions. My view is that if banks are too big to fail, using higher capital charges and an insolvency regime is not going to work. If they're too big to fail, they're just too big, and they should be broken up.

If they're too big to fail, they're also becoming too big to be saved, too big to be bailed out, and too big to be managed. No CEO can monitor the activities of thousands of separate profit and loss statements, and the activities of thousands of different bankers and traders. So that's one dimension. We must be capable of going beyond the Volcker Rule, which is essentially Glass-Steagall-Lite. We need to go all the way and implement the kind of restrictions between commercial banking and investment banking that existed under Glass-Steagall."

Roubini interviewed by AlterNet