"As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good. I don’t think the Obama administration can bring securitization back to life, and I don’t believe it should try."There are dream scenarios and then there is reality. Yes, the wizards on Wall St were frauds and the Big Bank's magic securitization was just a stage trick. Small community banks who kept their traditional business model did well through all this. The small guys were slow and steady investments, but they were not sexy. [Ironically it is the small banks being asked now to help out the big banks.]
Paul, you are a smart guy, with many leather bound books in your library that smell of rich mahogany, do you think America is ready for more humble, less sexy investments?
I hope America is ready for that. I hope the rules make it hard for risky schemes and regulation encourages playing by the rules. It seems it is in the best interest of the business world to keep the game going, rather than completely destroying it in the name of greed.
Source: NYT
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