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The answer, of course, is obvious, if politically difficult to put into effect. Staff the SEC, or whatever "Super Regulator" the government decides to deputize to oversee this mess, with a bunch of highly-paid, tough-as-nails, sonofabitch investment bankers. You will have to pay them millions, just like regular bankers. (You can tie their incentive pay to improvements in the value of securities held under TARP and TALF, if you like.) Pay them well, and investment bankers won't be able to treat them like second-class citizens at the negotiating table. Pay them like bankers, and your regulators won't hesitate to read Jamie Dimon or Lloyd Blankfein the riot act, because they won't give a shit about getting a job from them later.
Trust me, these are the kind of people you will need on your team: highly educated, financially sophisticated, psychotically hard-working, experienced professionals who know or can figure out CDOs, SIVs, balance sheet leverage, and credit default derivatives just as easily as the idiots who created and trade this shit. Leading your enforcement and supervision teams you need a bunch of smooth, smart, plausible, grandiosely self-confident senior bankers who will not hesitate to tell Vikram Pandit to go fuck himself, his mother, and the cow she rode in on if he ever tries to fuck with the United States government, the US taxpayer, or the pizza delivery boy again. You know: psychopaths. This is not a new idea. For yonks, the Brits have known that the best person to hire as gamekeeper on your ancestral estate is a former poacher, someone who knows what they know, how they think, and where to punch them in the genitals to get maximum negotiating effect.
This is not a new idea. For yonks, the Brits have known that the best person to hire as gamekeeper on your ancestral estate is a former poacher, someone who knows what they know, how they think, and where to punch them in the genitals to get maximum negotiating effect.
But I think there is some overestimation of the experience required. You (Migeru) could certainly figure out "CDOs, SIVs, balance sheet leverage, and credit default derivatives just as easily as the idiots who created and trade this shit."
Also, I don't see why you need to create yet another welfare scheme for investment bankers. This is not to say that employee poachers as gamekeepers would not work, but the key is not that they need pay equity, they need political backing... which is the real problem... they need to know that they won't be sacked when Vikram Pandit or whomever calls their congressman to complain.
Certainly they should be paid well... but it doesn't have to be insane money...
LOL, I guess that's why I work in the Risk Division of a major international bank. (As you know, this means I'm a loser since winners all work as traders and make at least 6 figures) The brainless should not be in banking -- Willem Buiter
And you don't need to have them running around in Armani suits to make the industry they regulate treat them as first among equals. You just need to give them a really big stick and permission to make examples of a couple of putatively too big to fail businesses.
- Jake Friends come and go. Enemies accumulate.
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