When Adam Smith wrote,” The Wealth of Nations”, he did not imagine that a class of property-owners, financial gurus and investment speculators, would hold societies to ransome and feather only their own nests.
When the African slaves were viciously transported to America, they worked in the cotton fields, in plantations and industries.
They created the material wealth that made America great.. Unfortunately, the distribution of wealth in America has favoured the Caucasian immigrants and other social groups.
With the decline in American fortunes and the world-wide economic crises of the last five years, it became very necessary to re-shape the way American financial institutions operated.
Initially, the financial establishment kicked against the drive to regulate their banking practices. Investment executives often misadvised their clients, promising EL DORADOS that ended in the wilderness.
The regulatory institutions were either complacent or incompetent. The banks should have been asked to beef up their capital in good time and this could have saved them from asking and desperately obtaining bail-outs from the government.
Recently, the United States Undersecretary, Lael Brainard observed that “the recent financial crisis underlined the necessity for banks world-wide to hold more capital to ensure that they can weather downturn. Mrs Brainard pointed out that the “lesson is clear: more and higher quality capital must be at the core of our efforts to ensure a more resilient financial system” There is no way the world can develop a globally convergent financial system if the United State’s financial order is not regulated more tightly.
The falsely canvassed opinion by the Tea Party that the Obama Administration is adopting socialist measures is convicted of error. The scare-crow system of political dialogue being adopted by this conglomerate of political malcontents and hecklers will do America no good.
We all understand the under-current flowing in the storm in their tea cups. Apart from fanning the mindless violence that seems to be the trademark of The Tea Party politics, rational people applaud the efforts being made by the OBAMA ADMINISTRATION to turn the fortunes of the United States around.
America does not need socialism but is in need of social policies that can bring about social change.
There is a consensus that some Americans are more priviledged than others. Some can borrow more easily to start businesses, repay loans and enjoy the good life. It must be pointed out that America is a land of opportunities and one can land on any page.
Wall Street has to reconcile its financial pursuits with the concerns of Main Street. In a nation, where a group eats the fat of the land, while others eke out their living as hewers of wood and drawers of water is bound to experience internal insecurity, muggings and mayhem caused by the dispossessed.
The OBAMA/DODD bill has woven a tidy net that will keep the US financial system under eagle-eyed regulators.
The US government has included in the bill, contingency plans for responding to emergencies and guidelines which flash warning lights to big and small corporations. The Era of Corporate recklessness is at its dead-end.
No bank will be granted a favoured treatment. The scope of operation is now well-defined.
Outsourcing of business has come under close watch as well as the export of capital.
American banks’ stress test mechanisms are now better defined. As a result, European banks operating in America will have to imbibe the new legal culture of probity
The standards of supervision and regulation are now very stringent. As a result, customer confidence will be restored and banking will no longer be casino lucky dip.
Financial speculators, investment ponzi schemes will be put under regulatory vigilance and that will be good for the American and world economies.