We couldn't have asked for a more thrilling, heart-stopping finale as we battled the American hockey team into overtime, ending with one brilliant goal that not only won us the game, but the record for Winter Olympic medals. However, it made me wonder...what would that game have looked like without a rule book?
Throw out all of the regulations, and I expect there would have been few players left standing by the final minutes. In a free-for-all, no doubt Sidney Crosby would have been crushed into the ice long before the first period was up. In fact, without any rules at all, maybe he'd have been mortally wounded by American gunfire in a mid-ice shootout.
Of course, no one suggests that hockey would be improved by anarchy. It's entertaining enough with penalties and referees, and sans gunfire and baseball bats to the head. But many who support rulebooks in sports want them burned in business. We've all seen how well that worked out. So is Obama going to bring back the penalty box?
Obama Proposes New Bank Regulations
I've long been critical of Obama for humiliating himself and the American public by giving away trillions to the financial sector under TARP without conditions, only to have to beg the banks the people saved to pretty please start doing their part to aid the recovery. Namely, quit hoarding capital and start lending it out to the very Americans who saved your asses. TARP was missing a rulebook.
Now, it appears he's starting to see the need to push harder for reform and regulation...
"Under the Obama proposal, banks that take federally insured deposits or have the right to borrow from the Fed would be prohibited from owning, investing in or sponsoring hedge funds or private-equity firms. "You can choose to engage in proprietary trading, or you can own a bank, but you can't do both," an administration official said.
The president also called for expanding the reach of a 1994 law that forbids banks from acquiring another bank if the deal would give it more than 10% of the nation's insured deposits. He would expand that limit to cover other types of funding—such as banks' short-term borrowing from financial markets—and perhaps put a cap on the share of assets any one firm could hold."
Will it be enough to prevent another crisis?
I'm not an uncritical supporter of regulations. As a Canadian, I've suffered through their inefficiencies: the Kafka-esque bureacracy, the wasted time, the sometimes unthinking and unfair application of the rules. However, they also proved to be the savior of the Canadian economy.
Our Chartered Banks fought for years to merge, saying "bigger is better". They also fought to be able to “compete” by eroding away their Tier 1 Capital requirements as their European and American counterparts had. It was those rules that they fought tooth and nail, that not only saved them and the general economy, but that allowed them to achieve the title of the world’s best banking system according to the World Bank.
Even considering the Obama proposals, American financial leaders are still bringing pistols onto the ice and using a two-foot wide net, and another crisis will happen. We've shown how to prevent catastrophe through judicious regulations, but unfortunately, Canada does not dictate what happens on the world stage. The U.S. does.
For now.
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