Skepticism of proposed regulations
June 29, 2009 | federal legislation, industry | Comments (0)From Robert Samuelson’s column in Newsweek:
Though these proposals sound sensible, they have potential drawbacks. Writing in The Wall Street Journal, Peter Wallison of the American Enterprise Institute argued that the very largest financial institutions would become the protected and pampered wards of the state. “Larger firms will squeeze out smaller ones,” he said. Consumer regulation sounds great. But if the protections are cumbersome and expensive, consumer credit will, paradoxically, become costlier. Lenders will compensate by raising interest rates or lending only to the safest borrowers.
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