Frantic rule-writing won't prevent next banking crisis

In his Bloomberg column, Clive Crook identifies why the current effort to create dozens of complex regulations to be overseen by regulators won't prevent the next banking crisis:

The emerging framework of regulation is no great departure from the one that failed in 2008 (USRINDEX). 

There’ll be no reinvention of finance -- it will be business mostly as before, within slightly tighter (and far more complicated) bounds. 

Rethinking from first principles? Maybe next time.

There’s been no political pressure to address this tough problem. 

Calls for bolder financial reform have come mostly from people who want to punish Wall Street and put bankers in jail -- an understandable sentiment, but also a distraction. 

Calls for more capital and a new Glass-Steagall fit the evil-banker template, so something, however inadequate, is happening. [Unfortunately, it too is a distraction.]

Please re-read the highlighted text as Mr. Crook has nicely summarized what your humble blogger has been saying since the beginning of the financial reform process.

Thanks to the Geithner Doctrine of do nothing that will hurt the profitability of a large or politically connected bank, there was no investigation into the causes of the crisis from a Pecora-type commission.  

Both the US' Financial Crisis Inquiry Commission and the UK's Commission on Banking Standards were given limited resources and time to investigate our current financial crisis.  More importantly, the decision on what financial reforms to pursue was made before these investigative bodies had submitted their conclusions and recommendations.

By definition, this precluded basing financial reform on addressing what actually caused the financial crisis, opacity, and returning to first principles, transparency.