Too Big To Fail Bank Approach Is Wrong

"We simply must have greater transparency in terms of what the banks are doing," said the former SEC chief to Bloomberg this evening. There is a need to shut down banks that are failing not let the government manage them.

Speaking of the future of the Wall Street Levitt stressed the need of having a systemic regulator, not the Fed. It must be headed by a newly appointed presidential appointee managing systemic risk.

Levitt said the Congress needs to do something about the derivatives. He says Congress does not fully understand the complexity of this issue. In the future he thinks Congress may turn the issue of derivatives to SEC.

Speaking of current electorate and business Levitt said that the relationship between the business community and political community is very comfortable. Yet, the electorate is fed up with the excesses of the Wall Street. So something needs to be done here too.

Today with a derivative we have only milliseconds to correct errors. Decades ago investors had more time to correct a mistake. Today's markets are global and electronic. Companies like Scottrade and E*Trade have made it very fast and global to buy and sell stocks. Time is short and the regulators need to do wise decisions about market regulation.

Written by Armen Hareyan