Morals and Ethics of the Leadership will avoid problems.
Human beings are who they are, leaders or not. The morals and ethics of leaders, on average, will be the exact same as the morals and ethics of everyone else.
The only real protections are systemic ones (e.g., checks and balances, and laws like Glass-Steagal). Thse are based on experience. We get into trouble when we think we can out-think the laws and institutions which result from experience, like when we repealed Glass-Steagal, which was a major contributor to the fiscal and economic crisis in America, or like when we think the Constitution, traditions, institutions, and customs don't apply to "modern" society, as if "modern" people are somehow more moral or ethical than people were 10, 50, 230, or 5,000 years ago.
-- Edited by winchester on Wednesday 6th of June 2012 12:09:57 PM
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It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” – Mark Twain
Post #33, Poetgrl: http://talk.collegeconfidential.com/14411123-post33.html
Small banks are complaining of mortgage doc/regulations are forcing them to get out of mortgages, consolidate into larger banks. -- Some of us are aware that the Savings and Loan's (remember them or don't remember them) were essentially deregulated by Ronald Reagan. Deregulation allowed the S&Ls to invest in builders and developers rather than just home mortgages->which resulted in $100bill+ cost to taxpayers, the Resolution Trust Agency, disappearance of S&L's, and a black eye for small town banking.
I know of three instances where a TBTF Bank (in 80's and 90's Glass-Steagal era) came under Regulatory supervision because it made too many bad home loans, then made big bets (loan) to a single country (twice).
Laws and Regulation cannot prevent failures. But the lack of Laws and Regulation will give us failures. Ultimately, Only the Morals and Ethics of the Leadership will avoid problems.
-- Edited by longprime on Sunday 20th of May 2012 11:29:13 PM
