‘It’s Time to Regulate All Global Financial Markets’

by James Parks, Mar 25, 2009

The global financial meltdown demonstrates the need to regulate all international financial markets, not only the important institutions, says Damon Silvers, vice chairman of the Congressional Oversight Panel (COP). The COP is examining how the Treasury Department is spending taxpayer money to help rescue the financial system.

Speaking yesterday at The Wall Street Journal’s Future of Finance Initiative, Silvers said the overhaul of the global regulatory system should be comprehensive.

All forms of money management in global markets ought to be under a regulatory scheme. Not just systematically significant ones, all of them. Otherwise, we ought to just basically admit that we don’t have regulated markets.

Silvers, associate general counsel for the AFL-CIO, says taxpayers are being asked to givie away too much to hedge funds and private equity in President Obama’s financial rescue package. The plan for public-private partnerships announced by the Treasury Department on Monday gives taxpayers 95 percent of the risk with only 50 percent of the benefits in buying the toxic assets. (See video.)

If you’re representing the public…and your lawyers came to you and said, “Here is the deal we struck. I take 95 percent of the risk, somebody else takes five and he gets 50 percent and I get 50 percent. What would you say?

The question is, who eats the loss in the course of getting banks back to life?

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