Steve Syre

New -- world headquarters building a target and -- That's veterans for a minute. And all right -- this.

I don't want I don't want regulate the financial markets itself like guy I don't have enough to do. I don't auto -- auto rental car company is. Like I don't have enough to do. I have the greatest say that ever happened little -- I don't want to do this site is doing this because I must something's have been left on my plate and NC it is it's because some the missile. I didn't ask to be the son of god what it just happen.

Pop pop -- Water -- Barack.

Because he doesn't -- and he doesn't want to have to regulate the markets but he's changing the way Washington does business. Not the old fashioned business he is the ones he apparently is the -- we've been waiting for -- and you're referring of course to Steve fire Steve sorry -- Boston -- who died right -- why do we have been waiting for our all weekend long -- Steve good morning. Yes Steve. How -- there is there -- Good bought it Steve has everything going.

It's great day is that everything has stopped raining all I was sitting there waiting to come on I -- it worked out. It's more rain is there.

It's unbelievable. -- so this morning you can celebrate cloudiness.

I can -- its its -- but it's gonna get wired.

so what did take on the president. You know it's assuming most such sweeping powers in so many areas.

I I couldn't hundred and you guys coming had a very very very complaining that he is revamping of financial markets you'd think it works so well last time.

of financial markets -- doing great didn't we have boom for about fifteen years or so.

Yeah I think we guess so quickly saw the results of what happened to -- and the underpinnings of that the last couple of years but but yes Obama is his big plans or around revamping financial markets. Is coming out Wednesday and then -- becomes -- whole. Dog and pony show after that Geithner the Treasury Secretary is in congress for hearings beginning on Thursday and able -- there'll be the big. Financial story of the week rolling out.

And is this good news in your mind you sounded excited about I see I don't trust these guys to do regulation because. I think there they'll be killing what's expression about the goose that laid the gold man and make Dell -- over regulate.

Well I think we you have to recognize we have gigantic. Failures in regulation. Toward the end of this market and much of the collapse. Of what happened here. Could be traced to ways that we regulated and track the -- and it was huge failures there are -- give -- an example you have to. Change the way things work in you know we don't know exactly what is gonna look like but he enough is leaked out news more stories today that you have a a pretty good outline and I would say. You know it does most of the things that that people expected. Among the things that are on the front burner or -- the idea. Some sort of regulator who. Looks at systemic risk which means that instead of looking it says. This bank over here in this insurance company in this brokerage in individually what they are okay or not that whether the system overall has become. -- too jacked up with leverage or other types of risk that it it threatens the whole. Economy overall and that was a big deal and people widely expected the Federal Reserve will have some. Greater role and responsibility and that.

So the Italian -- are like character.

I well you know they used to be did early on in this process meeting January February. Some. Momentum for the idea that lots of existing. Regulators would be swept away and that some giant's all seeing regulator would run everything in that would probably be the -- that. Kind of discussion has. Got away and most of the regulatory -- that exist out there will remain and and that it'll still be. Bank regulators and the FCC and things like that one of big issues that had existed before with the SEC it whether it should continue to exist. Or being merged into. The Commodity Futures Trading Commission which is a big. Complicated thing that most people don't follow but that the reason that people thought that they should be -- is that although. Trading commission wants. You know oversaw things like you know corn futures and things like that. It also overseas now lots of derivatives that companies issue and sort of having one eye on everything was. Seem to make a lot of sense and it didn't make sense except and here's the catch in Washington is that those two regulators are overseen by. Different committees in congress and there's a big power struggle ultimately. People didn't want to expand the capital necessary to try to. Affect something there so you don't have a lot of these elimination of the agency's regulatory agencies that people thought the only one that appears to be on the way out is OTS which is the Office of Thrift Supervision and this is perhaps the worst regulator of all -- If you go back in different times and say. Who was supposed to be minding the store when everything blow up. Over and over and it was vote yes and among the companies that this agency was supposed to be regulating includes Washington Mutual countrywide. Some of the worst disasters. -- India in the mortgage field so that one's going away but pretty much everybody else continues to. Exist.

Steve you know for separate and apart from the OTS debacle you mentioned the SEC originally there was slated for demolition of some type of elimination and then the political realities intruded isn't that going to be an unavoidable fact of life for whatever re emerges. For example let's just go back whether it's Clinton President Clinton whether it's President Bush whether it's the community organizer himself President Obama. All of them you know kind of pat themselves on the back about homeownership extending the glories in the benefits of homeownership. Many many more Americans. And in the end to put pressure on Fannie Mae and Freddie Mac and many many others to do things that would jest abhorrent the standards of landing.

You know. Right here is that the Fannie and Freddie historian you know ultimately we're talking about mortgages. Although they were certainly. Fannie and Freddie where offenders but they've -- the engine driving everybody off a web. You know as we've talked about before is in the mortgage business that I believe. You know that was essentially a Wall Street story. Any global -- Financial markets story and you know homeownership I think we've agreed that. You know it was something that. Ultimately it got too many people -- too many houses. It's correcting and that would be as something to continue to watch in the future but it. The thing that I look at and things like this and reorganizing. Regulators say that everything will be okay it didn't intrude. Most of what we have in place before it worked properly. Should've gave us lots of warnings about what was going on in should've. Curtailed a lot of the worst excesses you know when -- win you know the Bear Stearns -- Lehman Brothers. And other Wall Street brokerages were you know. Just. Piling up leverage left to right and so when they -- down -- it's sort of shook the whole system notices something that the FCC should have been on top of a long time ago -- completely abdicated it's responsibilities. When it when people started talking about the shadow banking system and Al you know through. Bonds and derivatives and things like that it's -- a mortgage market was being created that was completely unregulated. And away from the site. Conventional bank regulators. You know this was something that the Federal Reserve look at -- said. Well that's okay you know the market will take care of itself.

NASA artistic mark yeah.

Up instead and so if you had lots of existing regulators and the truth is that. Which you which you were in a position where things are getting more and more leverage more more risky and people are making lots of money in in that. Increased risk areas. -- Regulators on the ground have to have the political will to say. You know this is something that dangerous and we should. Slow it down we should stop doing this and it's very difficult because people are making too much money and there's no political will to say stop making so much money in hand and pull it back and so. It I think that the natural real. Reaction is to say let's change the way. Regulation work its report and let's reorganize everything. But ultimately it's really a political will question.

And and that's really where I come down on this whole thing that were always going to have this tension. That there's always going to be a struggle between over regulating it under regulating and when you have boom years in great economies that's going to lead to a falling way of regulation is everybody goes in the band wagon and then they'll be a crisis and they -- just perpetually have the swing back and forth even with such a reluctant. Commander in chief yes -- doesn't want to have to regulate financial markets jobs bill stimulus.

An agency that's going out there isn't new there's one new as sort of type regular coming in which is sort of a consumer protection. Sort of like. Products safety commission act kind of model. -- financial products yeah they have not sure about the details to others is going to happen it's sort of that. The brainchild of Elizabeth Warren Harvard law professors out there around. Causing a lot of waves on different other the subjects at the moment.

Are we can always trust the Harvard people to not screw things up I don't know about the consumer protection this week all right thank you Stephen -- we'll see tomorrow Steve sire from the Boston Globe he is I go to guy at the globe business reporter there and.