http://www.kenniffonline.com/advance-profits-insurance/
In light of the financial crisis, how can the system be the best reformed?
I have a mission in this, and currently has: 1. Addressing Incentive = Risk taking the guise of creating value = Solution bond alignment with long-term success rather than short-term benefits. Compensation into action is only valid in the long term. Perhaps a recapture clause on compensation of investment risk or not. Compensation cover? 2. "State guarantees "Problem = Knowledge of bailouts, privatized profits and socialized losses solutions = tax on financial transactions as a form of "Insurance" for the guarantee. narrow banking, breaking the banks to be small enough to allow it to fail. 3. Changing the regulatory structure Problem = Solution = Raise Too leverage capital requirements with bank size and greater protection against the risk Are there since I could include? Any problems with the application of any of these? Thanks in advance for any help:)
You can also add a limit on the amount of money a financial institution can bet on markets.I'm no expert, but now banks can borrow huge sums of money of others usually much more than the bank lends the money is deposited, and much more than the bank loan is collateral. It is only because of the huge sums involved that these investments'','' the arms of banks to make such huge profits and why if things go wrong so huge lose amounts.I believe that only should be allowed to bet the money they have on deposit or the value of assets such as houses that they own or have mortgages on.At the time may have a business that does nothing, does not provide service to any body, has no assets, but has a shares.These shares are then traded and the value goes up some merchants win and others lose the same thing happens if the price drops some win lose.During few thousand dot com boom of these companies are being established each day.That is the problem with the financial sector is not real quantities are playing with no refer to cash or assets hold.All have to do is to ensure the potential loss of a single transaction, however, their dealers that if not hundreds of thousands operations of a gamble day.If ten pounds and ten pence receives again its not very profitable, but if you play ten billion pounds and get the same pay as you leave with tens of thousands in profit all done in the space of a few minutes.That what is wrong and that the use of the fiction of money that needs to be reduced.
Milton Friedman on Self-Interest and the Profit Motive 1of2