The latest issue of Fortune contains the following exchange with Larry Summers, director of the White House?s National Economic Council:
Regulatory reform will mean higher capital requirements for financial institutions. Won’t that limit GDP growth?
The last generation saw a Latin American crisis, the 1987 stock market crash, the S&L debacle, the Mexican financial crisis, the LTCM financial crisis, the crashing of the Nasdaq bubble, Enron, and now this.
Surely that’s too much interference in the lives of too many people coming from the financial system, and it’s got to change.
I am very confident that you will see the most far-reaching financial regulatory changes since the Depression legislated in the near future. I don’t think it has to compromise growth. Properly regulating the financial system by promoting stability will lead to more steady and sustained investment and more economic growth.
Too much interference is correct. It?s too bad Mr. Summers doesn?t recognize the source of the most harmful form of interference ? government ? as demonstrated by the final paragraph in that quotation.
