I was planning on ignoring the regulatory non-news that was the Obama financial regulation press conference, but it seems to have gotten so much coverage from thoughtful people (Krugman, Baseline, Rortybomb, Robert Reich) that I can’t resist. They’re wrong, and so is the President. Or perhaps not wrong; missing the point.
The regulatory changes come in three main flavors:
Administrative reorganization. Streamlining the number of regulators, eliminating regulatory arbitrage, creating special resolution authority for bank holding companies, etc.
Skin in the game. Requiring originators of securities to hold some portion of the resulting security.
Consumer protection. Some watchdog agency to try to standardize and idiot-proof financial products.
Deck chairs on the Titanic.