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Response to dchill (Reply #2)

Wed Apr 13, 2016, 08:05 PM

3. I love Elizabeth Warren. But when it comes to economic analysis, Paul Krugman is a Nobel laureate in

economics. Warren knows a lot about the financial sector too but I'd have to go with Krugman on this.

Just breaking up big banks, by itself, would do nothing to help prevent another financial sector crash. Dodd-Frank established regulation of the trade in Financial Derivatives - e.g. Credit Default Swaps. This is the critical thing. We can't let banks trade in derivatives without this trade being regulated. Also, Dodd-Frank establishes that if a financial institution is deemed large enough to represent a threat to the financial system if they were to get into financial trouble - they are REQUIRED by law to carry larger reserves and are subject to even closer monitoring/regulation.


Is it perfect? Probably not. Can it be improved on?... most likely, YES. But breaking up large banks without recognizing the necessity of regulating trade in financial derivatives would lead to disaster ... again. Another problem with Sanders "plan" to deal with financial systems regulation is that it doesn't address 'shadow' banks which are dealt with in Clinton's plan.

Another thing with Sanders is he announces his goals, but when questioned for details he doesn't seem to have any idea how he would go about achieving these goals. That's what lead HRC to say "he doesn't seem to have done his homework.". It's not reassuring to here somebody say he's going to achieve great things but yet he doesn't seem to have any idea of how to achieve them when asked for details.


Warren, God love her, was the driving force behind the establishment of the Consumer Financial Protection Bureau. Something the GOP fought furiously against!





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Bill USA Apr 2016 OP
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dchill Apr 2016 #2
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