Dorgan: Financial Regulation Not a Four-Letter Word
Congress must pass strong, effective financial regulations to prevent another economic meltdown and to protect the American consumer, a leading senator said. Speaking this morning at the New America Foundation, Sen. Byron Dorgan (D-N.D.), said the nation’s economic wreckage can be traced back to the decision a decade ago to deregulate the financial system.
Not only did deregulation open up opportunities and incentives for risky banking behavior, but federal regulators who were supposed to be watching the financial industry weren’t doing their jobs, Dorgan said.
As early as 1994, Dorgan warned of the risks posed by one of the key ingredients in the recent financial collapse: the complex financial packages known as derivatives. In a Washington Monthly magazine cover story, “Very Risky Business,” he predicted the cascading failures of large lending institutions, the collapse of Fannie Mae, taxpayer-funded bailouts.
