WANKING VERSUS BANKING: Self-regulation and Financial Suicide

“I do not think you can trust bankers to control themselves. They are like heroin addicts”. Charlie Munger

“Deregulation is a transfer of power from the trodden to the treading”. George Monbiot

“It’s all very well to run around saying regulation is bad, get the government off our backs, etc. Of course, our lives are regulated. When you come to a stop sign, you stop; if you want to go fishing, you get a license; if you want to shoot ducks, you can shoot only three ducks. The alternative is dead bodies at the intersection, no fish, and no ducks”. Molly Ivins

“If we want our regulators to do better, we have to embrace a simple idea: regulation isn’t an obstacle to thriving free markets; it’s a vital part of them”. James Surowiecki

“Deposit insurance has proved to be the crack cocaine of American finance”. Martin Mayer

In the aftermath of yet another bank bailout for the ultra-rich (1st Republic) and Pacific Western nearing the brink, we have to ask ourselves, where are the regulators in all this. Short answer, asleep at the wheel, once again (Note: https://nymag.com/intelligencer/2023/05/first-republic-deserved-to-die.html?utm_). As the GAO (Government Accountability Office) pointed out regarding our other two recent bailout episodes:

In the 5 years prior to 2023, regulators identified concerns with Silicon Valley Bank and Signature Bank, but both banks were slow to mitigate the…