Yesterday, The Epicurean Dealmaker
penned an excellent piece laying out his "poacher turned gameskeeper" theory
on financial regulatory reform. The heart of the "poacher turned gameskeeper" theory is belief that in order to regulate investment banks, you need investment bankers (and you need to pay them banker wages).
Now Dick Fuld, at least in his prime, was a forceful and scary man. It takes a certain kind of personality to tell such a man to go fuck himself to his face. Fortunately, we just happen to have a substantial supply of brass-balled, take-no-prisoners, kill-'em-all-and-let-God-sort-'em-out people ready to hand. By happy coincidence, these individuals also happen to be intimately familiar with the ins and outs of the global financial system, the nature and construction of the myriad securities and engineered products polluting financial markets, and the numberless tricks and stratagems large financial institutions use to end-run rules and regulations designed to keep them in check.
These people are called investment bankers.
That's right, boys and girls: It's time for the chickens to band together and hire themselves some foxes to guard the chicken coop.
At the end of his post he alludes to the many naysayers who say "it could never happen" and concedes that perhaps they are correct. To this I would say the U.S. Government has already done this in some respect in protecting its information system, so why not it's financial system.
Last year, it was announced that the U.S. government was looking to hackers to help protect its cyber networks.
From USA Today,
Buffeted by millions of digital scans and attacks each day, federal authorities are looking for hackers — not to prosecute them, but to pay them to secure the nation's networks.
General Dynamics Information Technology put out an ad last month on behalf of the Homeland Security Department seeking someone who could "think like the bad guy." Applicants, it said, must understand hackers' tools and tactics and be able to analyze Internet traffic and identify vulnerabilities in the federal systems.
The rationale behind hiring hackers and paying them to change the color of their hat from black to white is the same rationale that TED uses to hire investment bankers to regulate and protect the system.
Can the financial system be "hacked". Leigh Caldwell thinks so. In his piece, "Why Can Finance be Hacked?" he writes, "the finance market has nearly all the characteristics of an insecure, unstable, hackable multi-user computer"
And, thus aren't bankers similar to hackers? The regulators lay out a set of rules of the system and the bankers seek to "hack" the system to their advantage. Who better design and regulate the system then the hackers themselves? You pay them enough to change teams and we might end up with a financial system that is more secure. We are already doing this with the system that protects our national data, why would it be so radical to do it system that protects our national wealth. Besides, aren't both really just bits and bytes of information?