Heads they win, tales we all lose. The first (glaringly obvious) step is to sever the risk seeking from the deposit taking functions. This means breaking apart today’s ridiculously conflicted mega banks. Only deposit taking arms should be in any way underwritten by taxpayer backing. Risk seeking divisions must be returned to independent partnerships where actors live and die on their own risk management. And salespeople must stop being marketed as advisers. The rest would take care of itself.
“Boombustology” Author Vikram Mansharamani discusses financial reforms. He speaks on “Bloomberg Surveillance.” Here is a direct video link.
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