Nasty Truths About U.S. Fintech • Hacker News Board

Re: Nasty Truths About U.S. Fintech

#81

Post by Cederfjard » Thu, Jul 30, 2015, 5:20 PM UTC

reviseddamage wrote: post #60

thinkcomp wrote: post #14

I testified before Congress on this issue. http://www.aarongreenspan.com/writing/20131118.hsgacstatemen... CFPB comment (mostly the same, some exhibits also) here: http://www.thinkcomputer.com/20140214.cfpbcomment.pdf Nothing has changed, and Y Combinator certainly hasn't helped. In fact, they and just about every VC-backed portfolio company have made the situation far worse by convincing legislators that everything…

What is YC's involvement in this? What are you referring to?

A little bit of (somewhat relevant) context: https://news.ycombinator.com/item?id=7718034

Re: Nasty Truths About U.S. Fintech

#82

Post by jnordwick » Thu, Jul 30, 2015, 5:36 PM UTC

zhte415 wrote: post #34

wyclif wrote: post #12

Earlier quoted context omitted.

I honestly didn't know the word "FinTech" was a thing—this is the first time I've seen it.

Having worked in banking/finance/technology for a decade+, the first time I remember registering hearing the term was around 3 months ago, from a lawyer I contacted regarding opening an office in the UK, who was quite proud to say "technology in finance is called FinTech, which is becoming a big thing". This led me to conclude it is a fad/scene word.

Common parlance. My consulting company even has fintech in its domain name, and I've been using it for a few years.

Re: Nasty Truths About U.S. Fintech

#83

Post by yummyfajitas » Thu, Jul 30, 2015, 5:53 PM UTC

dragonwriter wrote: post #76

yummyfajitas wrote: post #73

Earlier quoted context omitted.

GS and worthy oversight would have nipped most of this in the bud. Again, please explain how - i.e., concrete mechanisms, not vague "if we passed this law that didn't really change anything, maybe culture would have been different". Just look at what these banks had on their balance sheets at the time... Please be specific. Which banks are you referring to, and how would GS have significantly affected things? As far…

> Also, it's odd how the S&L crisis happened before GS was repealed Not really. The 2000s banking crisis happened not long after banking regulations were repealede, the S&L crisis happened after S&L regulations were repealed. (In both cases, the repeals were justified on the basis that the increased freedom would strengthen the deregulated industry and the broader economy.)

Scroll up. TheOtherHobbes claimed: With something like GS regulators would have been able to...It's not always the specific regulatory details that matter, so much as the culture they create.

Apparently the existence of GS did not actually allow regulators to have this magic culture and prevent the S&L crisis. But you do have even more vague generalities that don't mention any specific mechanism.

Tomorrow I'm going to my boss and telling him "we need more code!" I'll refuse to say what the code should do, but I'll point out that Homejoy refactored their codebase before dying of a bad business model.

Re: Nasty Truths About U.S. Fintech

#84

Post by nickpsecurity » Thu, Jul 30, 2015, 6:36 PM UTC

spacecowboy_lon wrote: post #71

nickpsecurity wrote: post #67

Earlier quoted context omitted.

Iceland did a combination of things. They put dirty politicians in jail, got better ones in office, seized the banking system, re-focused it on stable growth rather than greed, and knocked out fraudulent debts with laws. The U.S. could've done quite a bit of that. We could've even pitted Wall St's geniuses against each other by talking the companies and then offering financial incentives to those that help ensure bai…

these fraudulent debts would be those UK pensioners and UK local government who had savings with the Icelandic banks.

Possible. I was talking about the debt on the side of Icelandic bankers working with dirty politicians to make their banks money and take people's homes with predatory practices. The same crap they did over here.

Sorry to hear it if people in UK got caught up in the mess.

Re: Nasty Truths About U.S. Fintech

#85

Post by dragonwriter » Thu, Jul 30, 2015, 6:51 PM UTC

yummyfajitas wrote: post #83

dragonwriter wrote: post #76

Earlier quoted context omitted.

> Also, it's odd how the S&L crisis happened before GS was repealed Not really. The 2000s banking crisis happened not long after banking regulations were repealede, the S&L crisis happened after S&L regulations were repealed. (In both cases, the repeals were justified on the basis that the increased freedom would strengthen the deregulated industry and the broader economy.)

Scroll up. TheOtherHobbes claimed: With something like GS regulators would have been able to...It's not always the specific regulatory details that matter, so much as the culture they create. Apparently the existence of GS did not actually allow regulators to have this magic culture and prevent the S&L crisis. But you do have even more vague generalities that don't mention any specific mechanism. Tomorrow I'm going t…

> Apparently the existence of GS did not actually allow regulators to have this magic culture and prevent the S&L crisis.

Banking and S&L regulations were two separate structures, with different regulatory organizations, and, presumably therefore, somewhat isolated organizational cultures in those organizations. Even if GS had an effect on regulatory culture in banking regulation outside of its specific restrictions, there's no reason it would have had the same effect on S&L regulatory culture.

There are lots of legitimate arguments that might be marshaled against the proposition that eliminating GS enabled the 2000s banking crisis through its effect on the relevant regulatory culture rather than its specific rules, but "the 1980s S&L crisis happened with GS in place" isn't among them.

Re: Nasty Truths About U.S. Fintech

#86

Post by TheOtherHobbes » Fri, Jul 31, 2015, 12:02 AM UTC

yummyfajitas wrote: post #83

dragonwriter wrote: post #76

Earlier quoted context omitted.

> Also, it's odd how the S&L crisis happened before GS was repealed Not really. The 2000s banking crisis happened not long after banking regulations were repealede, the S&L crisis happened after S&L regulations were repealed. (In both cases, the repeals were justified on the basis that the increased freedom would strengthen the deregulated industry and the broader economy.)

Scroll up. TheOtherHobbes claimed: With something like GS regulators would have been able to...It's not always the specific regulatory details that matter, so much as the culture they create. Apparently the existence of GS did not actually allow regulators to have this magic culture and prevent the S&L crisis. But you do have even more vague generalities that don't mention any specific mechanism. Tomorrow I'm going t…

In fact my argument is that the industry set itself up for meltdowns as soon as regulation stopped having teeth, and meltdowns duly happened when regulations were formally repealed.

Your argument seems to be that the two were unconnected, because regulation cannot possibly be relevant, therefore reasons.

You'll have to ask your boss which argument he finds more convincing.

Re: Nasty Truths About U.S. Fintech

#87

Post by yummyfajitas » Fri, Jul 31, 2015, 2:02 AM UTC

TheOtherHobbes wrote: post #86

yummyfajitas wrote: post #83

Earlier quoted context omitted.

Scroll up. TheOtherHobbes claimed: With something like GS regulators would have been able to...It's not always the specific regulatory details that matter, so much as the culture they create. Apparently the existence of GS did not actually allow regulators to have this magic culture and prevent the S&L crisis. But you do have even more vague generalities that don't mention any specific mechanism. Tomorrow I'm going t…

In fact my argument is that the industry set itself up for meltdowns as soon as regulation stopped having teeth, and meltdowns duly happened when regulations were formally repealed. Your argument seems to be that the two were unconnected, because regulation cannot possibly be relevant, therefore reasons. You'll have to ask your boss which argument he finds more convincing.

Try to pay attention. I'm saying that the specific regulation you cite had nothing whatsoever to do with the crisis since the main culprits in 2008 were already obeying GS. I.e., telling Bear not to issue mortgages and telling WaMu not to do IPOs would not have changed anything since they already didn't do those things.

I'm also saying that your magic culture theory of regulation, if true, should have prevented the S&L crisis (since GS was in force then). But I guess you were wrong, and GS isn't actually the magic regulatory pixie dust that causes regulators to solve all the problems? If so, what is?

(Yes, that's a dangerous question, because the minute you mention a law I'll just find a financial crisis from before that law was repealed.)

Re: Nasty Truths About U.S. Fintech

#88

Post by ConfuciusSay » Fri, Jul 31, 2015, 4:56 PM UTC

cm2187 wrote: post #24

nickpsecurity wrote: post #17

The article seems to overlook the main obstacle: the banking cartel. The big bankers in the U.S. are among its most powerful lobbyists. The current system benefits them plenty. They like it the way it is. They'll sure push to streamline red tape where possible but a near-zero barrier to entry would eat into their profits. So, they'll continue paying politicians to ensure the status quo and collecting all kinds of fee…

It's rather the excess of regulation due to anti-bank sentiment that creates these barriers to entry. Banks are rather calling for less regulations, and when they got it their way in the 90s, it is what happened. But it is true that the excess of regulation is reenforcing the position of the incumbents. Banks have to staff full time employees just to read the amount of draft regulations and consultation papers publis…

It is not a binary "banks always want less regulation". Banks, like other entrenched interests, will be for or against regulations, depending on if they advance their interests or not.

You see this in every industry. The energy industry hates environmental regulations, but they like more regulations when it serves to diminish the viability of alternatives like solar.