- Depression era Glass Steagall legislation needs to be restored (it was repealed in 1998). Separating FDIC deposit banks with much riskier Wall Street iBanks and speculators is imperative. [ibank = investment bank]
- The Commodity Futures Modernization Act of 2000 needs to be repealed, (Those opposed to this repeal should be deported).
- Rating agencies need to have their official SEC charters revoked. If they want to sell ratings, they need to do so in the marketplace, not by regulatory mandate.
- The SEC issued “Bear Stearns exemption” — replacing the 1975 Net Capitalization Rule’s 12 to 1 leverage limit to with essentially unlimited leverage — needs to be legislatively revoked, and the old rule officially reinstated.
- The Depository Bank Reserve Rules that have whittled away need to be restored to decades ago levels. Basel 3 does not go far enough. And Federally Pre-emption of States anti-predatory lending laws must be revoked.
- The Federal Reserve must focus on Employment and Inflation — not backstopping speculators.
- Nonbank mortgage underwriters (i.e., Subprime lenders) need to be subjected to same comprehensive federal supervision as other banks. Traditional credit standards need to be applied.
- Mortgage underwriting standards must revert to pre-2000 standards, including verifying income, payment history, and credit scores, Loan to value (LTV). And Automated underwriting (AU) systems need to be revamped or removed.
- “Innovative” mortgage products — 2/28 ARMs, I/O s, Neg Ams — need to have stronger restrictions on them
- Clawbacks of corporate bonuses AND stock sales paid for transactions that eventually turn out to be false, temporary, or losing positions (think subprime or CDO underwriting) must be the law of the land. This includes sales people, trading desks and executives.
Vitus note: The first five would do it. You can take that to the bank. Wait...
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