Soros On Financial Reform

Some of you may be following the Senate hearings today. Here is George Soros on what needs to happen: Do not ignore the need for financial reform. It was written on October 25, 2009.

At the moment, Goldman CEO Lloyd Blankfein is being questioned by Senate investigators. Senator Levin has done a very good job this morning of presenting a use case of the failure of the current financial system and the kinds of conflicts of interest that prevail.

How all this unfolds, we shall see. But in general, I resonate with Soros that markets and bubbles need to be managed, regulated, and kept under control so that they don’t create such systemic panic.

Blankfein seems to agree.

That’s a good start. Soros, Blankfein, and the titans of Wall Street are the most knowledgeable about the system within which they operate. Who can provide a better analysis of what caused the kind of systemic failure we just experienced?

Who can better debug this system than those who understand it best?

Blankfein, for example, is arguing in favor of higher capital reserve and lower leverage. Good. He says it will make loans more expensive and harder to obtain. That’s good too, because free credit was also one of the culprits of the catastrophe.

In any case, at least, in today’s America, the right questions are being asked.

That’s half the battle, already.