Is Obamacare Already Dead? | Mother Jones

Must-Read: Successful financial regulation is a matter of well-known and well-understood basics: blocking and tackling:

Thomas Hoenig: Basic Principles of Banking: Hoenig on Restoring Glass Steagall: "With each financial crisis new regulations are added to an already long list of rules...

...Even so, the industry repeatedly finds itself tangled in financial crisis, struggling to avoid collapse and economic ruin. This happens despite assurances that the industry and its supervisors have become more sophisticated in their analyses and smarter in their decisions. However, there is compelling evidence that keeping with simple but well-tested principles can serve the industry, supervisors, and the public best:

  1. Underwriting standards and asset quality should be systematically reviewed and tested, first by the firms and then checked by the supervisor.

  2. Better disclosure of results will improve performance; it almost always does.

  3. Separating commercial banking and its inherent safety net from broker-dealer and proprietary trading activities will diminish conflicts of interest and abuse of the safety net....

  4. Finally, better capitalized is not the same as well capitalized, and it’s important to acknowledge the difference.

  5. Insisting that bank ownership provide funding—capital—commensurate with the bank’s risk appetite is the most fundamental step for assuring that the banking system is a contributor to economic growth.

I would add that limiting the optionality of the real decision makers is perhaps the most important: their payoffs should not be too convex...