In a headline (“Banks take blame for credit crisis”) that could almost come from the Onion, I saw this in the Financial Times:
The Institute of International Finance, representing more than 375 of the world’s largest financial companies, acknowledged “major points of weaknesses in business practices”, including bankers’ pay and the management of risk.
But it said it would be “completely wrong” for the authorities to impose much greater regulation on the industry. [link]
I’m not sure if increased regulation will help the situation. Strategic regulation might help. Policies usually start off as brute-force measures which are then ultimately finessed. We are dealing with a plethora of new credit instruments which no one really bothered to watch carefully. Or more appropriately, no one bothered to think about the downside carefully enough. Now we know better, though.
Anyhow, I’m not sure if the banks’ statement is going to make any difference one way or another.