Editorials

<< Previous   of   Next >>   ADVERTISEMENT   HAVE YOUR SAY Feel strongly about something? Share it with the community by writing a letter to the editor. You’ll need to include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 250 words or less, we won’t ask you to shorten it. If your letter is published, please wait 30 days before submitting another. Send it to: E-mail: letters@heraldnet.com Mail: Letters section The Herald P.O. Box 930 Everett, WA 98206 Fax: 425-339-3458 Have a question about letters? Contact Carol MacPherson (cmacpherson@heraldnet.com or 425-339-3472).   Published: Sunday, January 4, 2009 IN OUR VIEW Financial system beset by greed won't survive Greed n. A rapacious desire for more than one needs or deserves, as of food, wealth or power; avarice. Contrary to the opinion of the villainous Gordon Gekko, played with Oscar-winning depravity by Michael Douglas in Oliver Stone's 1987 classic "Wall Street," greed is not good. Of the lessons learned from 2008's near-collapse of the world financial system, that's at the top of the list. Following an audacious period of free-market excess, in which rules seemed to be ignored as much by regulators as those they were supposed to be regulating, 2009 figures to be a year of re-regulation, in which the emphasis will be on getting the financial system back onto a rational playing field. Overreaction is a danger. Congress and the Obama administration must resist the temptation to write so many rules that they drown innovation in the financial sector. Yes, innovation run amok was among the culprits that created the current mess -- the indecipherable nature of credit default swaps is one example. But innovation is also key to healthy growth in any sector; too much regulation can stifle positive innovation. The goal must be balance -- the right kind of regulation, and just enough of it, to ensure the integrity of the financial system without holding it back unnecessarily. The rules should be sensible and clear. The players must know that referees are watching, and will hand out penalties when they see rules being broken. Those who play by the game well and follow the rules should be rewarded. That had become a foreign concept in some institutions, chief among them Washington Mutual, the old "friend of the family" that had become anything but. According to an excellent investigative piece by The New York Times, WaMu had become a banking behemoth by adopting a culture of brazen disregard for the most basic lending standards. Mortgage applicants who WaMu officials knew wouldn't be able to make their payments were routinely approved. The bank would bundle the bad loans and sell them off as exotic securities, so it could pocket the loan fees but not be on the hook for the inevitable default. Through it all, disgraced WaMu CEO Kerry Killinger, other executives and a lot of mortgage brokers got filthy rich. Greed, as it will when no one is watching, overpowered integrity. Financial gain is not a sin, nor is being motivated by it. But if one's moral compass doesn't exclude greed, it's broken. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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