Whoa there. Surely a big money person like George Soros isn't calling for more reform that the President, is he? Doesn't Soros know how the system works and that we need a "light touch"? Clearly he's a communist who doesn't understand the market. It may be better to go easy on Wall Street and just let them create new problems and then deal with the mess.
"Proprietary trading ought to be financed out of a bank's own capital," Soros wrote in the opinion piece. "If a bank is too big to fail, regulators must go even further to protect its capital from undue risk. They must regulate the compensation packages of proprietary traders so that risks and rewards are properly aligned."What's all this talk about "too big to fail" anyway? Now that the banks have increased their capital based on already passed worst case scenarios, what could possibly go wrong? Isn't the whole purpose of this new effort by Treasury and the White House to reduce the number of strong banks or have I completely missed their subtle hints?
Hedge funds and other big investors should be monitored to ensure that they don't accumulate "dangerous imbalances," while the trading and issuing of derivatives should be as strictly regulated as that of stocks, he wrote.
"Custom-made derivatives only serve to improve the profit margin of the financial engineers designing them," Soros said, reiterating his view that some derivatives, such as credit default swaps, should be outlawed.
