It is fairly simple to devise good ways to remedy the problems that led to the current debacle. On the other hand, it is very hard politically to have these solutions correctly identified and implemented. The current public policy fixes will only make matters worse.
Yaeh but the whole point of credit default swaps was to get rid of those reserve requirements and free up that money to make money!!!!! And bigger year end bonuses!!!!!!
They were dreamed up by some JP Morgan boys in 1997 to free up those reserves and put them to work.
Credit default swap - Wikipedia, the free encyclopedia
Credit Default Swaps were invented in 1997 by a team working for JPMorgan Chase [7] [8] [9]. They were designed to shift the risk of default to a ...
en.wikipedia.org/wiki/Credit_default_swap - 121k - Cached - Similar pages