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Architects of the government's response to the latest financial crisis worry that the country is poorly equipped to handle another, fearing that a "amnesia" will grab policy makers, regulators and the public that could lead to the next panic. ] Four former regulators and treasury secretaries, once prominent but now disconnected from public view, said last week that they hoped to use the 10th anniversary of the Great Recession to force a public debate on how to prevent that. another crisis does ravage the economy Former US Treasury secretaries, Henry Paulson and Timothy Geithner, and former Federal Reserve Chairman Ben Bernanke, met with reporters last week to discuss the summit. September that they are in the process of organizing. lessons learned – both good and bad – from the crisis
"What worries me the most, it's part of the rhetoric and amnesia. President of the Federal Deposit Insurance Corp., Sheila Bair, said she also feared that Washington's wave of deregulation could sow the seeds of the next crisis, thus creating "C & # 39; is the same kind of thing that we saw in 2005 and 2006, "said Bair.
Some of them said that the public rage at the end of the war. The bailout of the government and the Washington's initiative to restrict regulatory bodies could prevent policy makers from intervening, said Paulson.In 2008, he asked Congress for an unlimited line of credit to try to stop the bank panic and finally settled on a $ 700 billion fund under the name of Troubled Asset Relief Program, which was used to stabilize the system. He wondered if the public or political leaders would allow this to happen now, given the populist hold that has seized the country.
The financial crisis reached its peak 10 years ago, a global banking panic that shook the stock markets. has cleared thousands of businesses, cleared billions of dollars in savings and pushed unemployment from 4.7% to 10% in 24 months.
To stop the panic, the Bush and Obama administrations have used controversial methods and – sometimes flood the financial markets with taxpayers' money. Bernanke, Geithner, Paulson and Bair have managed to prevent a new Great Depression, but the return of populism to their actions has created scars that persist today, fueling the clbad. the war that went through multiple elections.
He also led Congress to remove some of the emergency powers used by the government. For example, the government retained the ability to donate money to a specific company, but it became much more difficult to set up a broader emergency loan program without having to pay for it. Congress approval
. from other industries, cutting the reach of the consumer protection agency created after the crisis and limiting the scope of the Federal Reserve.
Now, some of the people who led the response to the crisis fear that a weakened regulatory system
The government has "an arsenal of urgency a little weaker to cope with to the extreme financial crisis "than ten years ago, said Geithner. other powers of reaction, such as the possibility of making emergency loans in the banking system to stem a run to the bank or panic.
He said that flexibility is now limited, in law dd-Frank has made it much more difficult to establish major rescue programs. He said this could increase the risk that regulators do not have the economic strength to prevent a recession from becoming a crisis.
Bair said that she saw disturbing signs now. The Federal Reserve is considering modifying the "stress tests" that it began using in 2009 to control banks, and some of these changes could ease the pbadage of financial companies. She said regulators should ask banks to use this period of economic strength to build up their reserves even more, so that they enjoy adequate protection during the next recession period [19659012"ThenextdownturnwilloccurinafewyearsIdonotknow"saidBairwhowasappointedtoofficebyPresidentGeorgeWBush"Butitwillbefineifthebankshaveenoughcapitalandcancontinuetolendiftheycannotwewillhaveanotherproblem"
Paulson, Bair, Bernanke and Geithner each wrote a book about their experiences during the crisis. They said that the government's response to the next crisis will not only depend on the rules, but is able to apply them to the White House but also to the Fed, the Treasury and the FDIC.
What will have to be done during a crisis often turns out to be unpopular and heartbreaking.
Geithner, Bernanke and Paulson stated that the purpose of the September summit, which will be organized by the Brookings Institution, is not necessarily to identify the causes. of the next crisis, but to ensure that decision makers know the types of tools they will need to react when they do.
"Too often you look at the scene of the latest crime," said Paulson. Administration officials attributed the reaction to the financial crisis, in particular the Dodd-Frank law pbaded in 2010, to the bureaucratization of the financial system and the difficulty for banks to lend. They blamed Democrats and regulators Paulson, Geithner and Bernanke for over-imposing the government on the financial markets.
Now the White House and Republicans in Congress, aided by a number of Democrats, have taken steps for In addition, Trump has appointed Mick Mulvaney, his chief of the budget, to temporarily head an agency to regulate products financial services for consumers. One of the causes of the crisis, 10 years ago, was the widespread extension of poor credit products to many Americans who did not have the ability to pay back.
Mulvaney took steps to limit the scope of this agency. it is easier for people to get loans. But this has caused an uproar on the part of Democrats who fear that the abuses of the past will resurface.
"I think the important intention of eroding and reducing consumer protection is something we will regret as a country", Geithner
-Heather Long contributed to this report .
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