Better late than never. The same people who don’t think we have an economic problem also thought it was OK to let this shady market evade oversight. If the risks weren’t so high and the impact for everyone so great it would be one thing, but as we now know that was not the case. Treasury really needs to address the issue of high risk/high reward because as it stands today, Wall Street took plenty of risk and regardless of the outcome continues to pay high rewards even though it’s not their own money. The gambling might be limited if this group actually had to eat their own losses.
It’s about time some level of oversight is coming.
The Obama administration is asking Congress to extend its oversight of the financial system to include the shadowy market of derivatives, the kind of complex financial instruments that helped bring down the giant insurer AIG.
In a two-page letter sent Wednesday to congressional leaders, Treasury Secretary Timothy Geithner said he wants to create a central electronic-based system that would track the buying and selling of derivatives. He also wants to ensure that financial firms selling the instruments have enough capital on hand in case they default and subject them to stringent standards of conduct and new reporting requirements.