Key issues include creating an agency to protect consumers, increasing the transparency of the derivatives market, and deciding how much authority to give regulators over companies deemed too large to fail. Bipartisan support is far from assured.
There is cautious optimism that a compromise can be found, though some worry that the end result will not prevent future calamities.
As Ambrose Bierce once wrote, reform is “a thing that mostly satisfies reformers as opposed to reformation.”
Fortunately, for readers interested in learning more about this subject, there has been a bull market for books on the crisis on Wall Street. A few of these books have been highlighted below. All are available to cardholders of the Newport Beach Public Library.
Kate Kelly, a Wall Street Journal reporter, goes behind the scenes to report on the collapse of Bear Stearns. “Street Fighters” is her riveting account of the final 72 hours of this once-proud firm.
In “13 Bankers,” economists Simon Johnson and James Kwak take aim at the consolidation of the banking industry as a root cause of the recent crisis. Critical of both deregulation efforts and government bailouts, the authors favor restructuring the industry into entities that are “small enough to fail.”
New York Times reporter Andrew Ross Sorkin reconstructs the events of September 2008 involving Lehman Brothers, AIG and Merrill Lynch, and the desperate attempts to prevent their failure. In “Too Big to Fail,” Sorkin faults the greed, ego and irresponsibility of individuals within a culture that encouraged excessive risk-taking but resisted efforts at regulation.
