G20 Bank Action

While over-regulation is certainly possible -- putting some structure to bank compensations seems appropriate. Historically, bank executives seemed too eager to try to compete with investment banks and hedge funds to recruit people (and overpay them) and take risks with such (betting a lot of bank capital). This is all while being subsidized by the public with low cost deposit funding.

With stronger bank capital requirements -- still think the issue are: (a) the need for better regulators (not smarter ones who know they are smart and powerful -- more effective ones), (b) deposit insurance premiums that better reflects the risks of particular banks, and (c) a more dynamic concept of risk capital (and one that allows for lower capital requirements during recessions -- rather than killing banks by making them sell assets during the worst market conditions to meet static requirements -- CAPITAL LEVELS ARE SUPPOSED TO BE LOWER DURING DIFFICULT PERIODS).

Hopefully, in addition to regulation -- hopefully the G20 will also consider organizing themselves so that all countries do not overinvest in the same things. One idea would be a bidding process for certain technology areas (with the proceeds of the bids going to develop lesser countries).