Dealbreaker’s Matt Levine writes: When JPMorgan’s whale
drowned a lot of people asked “where were the regulators?” and that was a silly
question, because the people with the most incentive and ability to keep the
whale afloat were, in descending order, (1) the whale, (2) the whale’s bosses,
(3) the whale’s bosses bosses, (4) the regulators, and (5) the people asking
“where were the regulators?,” so if categories 1-3 missed the problem then
there’s no reason to get all mad at category 4. “If X’s could do Y they
wouldn’t be X’s” is an important tool to keep in your mental toolkit, and if
regulators could distinguish good from bad trades they’d be at least risk
managers and probably, like, Warren Buffett.
What regulators are supposed to do, ideally, is not pick
trades but rather set up systems to prevent bad trades from having ruinous
systemic effects, and a major method of doing so is capital regulation…
No comments:
Post a Comment