“The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the “rules of the game” and as an umpire to interpret and enforce the rules decided on.”
Sports leagues rely on rules and officials to assure fair competition. When the National Football League tried to break the referees’ union by bringing in inexperienced refs, fans quickly discovered the results of poorly enforced rules. The replacement refs made one glaring mistake after another. Teams that should have won lost. The public outcry led to a quick restoration of capable officials.
Poor financial regulation gets less attention than poor refereeing, perhaps because it is not broadcast on TV, but we have all suffered from the effects of both bad rules and bad enforcement. As earlier chapters have described, bad regulation contributed greatly to the recent financial crisis and its aftermath. Even when the terrible effects became obvious, the regulations were not adequately fixed. In fact, the abuses are continuing. Clearly, those in government are not willing to do what is needed to hold the abusers accountable for their actions. Why? Because the status quo serves the interest of Wall Street and the banks’ influence on politicians and regulators is pervasive. So we need public outrage to demand better regulation.
Many people, both in Occupy Wall Street and outside, believe that our current financial/governmental/regulatory system is beyond repair and something very different must replace it. But even those with that ultimate goal must not, in the meantime, simply accede to whatever rules the corporate interests and lobbyists impose. In this chapter, we outline a framework for regulatory reforms that will move toward a system where the rules are enforced fairly, powerful miscreants are brought to justice, and the 99% have a representative voice in the political and regulatory processes.
The suggested reforms are by no means a complete fix of our economic arrangements. But they illustrate that, even within the existing system, the rules could be much fairer, predatory practices could be much less prevalent, power could be much more equitably distributed, and violators could be punished even if they are rich and powerful. These are useful steps toward getting we, the people, involved in deciding what needs to be done and how it should be done. It is a reclaiming of the people’s power.
The current problems with financial regulation are not inevitable. The financial system used to be better regulated and it can be again. There are also examples of good regulation that prove it is possible. For instance, those of us who live in Los Angeles or New York City will be familiar with the letter grades A, B, or C prominently displayed on restaurant windows. This simple measure has improved restaurant hygiene and reduced severe food-borne illness. As the Consumer Financial Protection Bureau has shown, better rules and regulation of the financial industry are also possible.
This chapter proposes a framework for what we call “Popular Regulation”. We call this approach “popular regulation” because it will make regulation more transparent, effective, and protective. But, more fundamentally, it will make the people’s interests and the people’s voices more prominent.
Principles of Popular Regulation
Popular regulation is defined by four principles:
Responsible and accountable: Society must expect the regulators and the regulated to behave responsibly. When they don’t they must be held accountable. There are three significant aspects of responsibility:.
- At the most basic level, companies and people must be held accountable when they break the rules or abuse the public trust. As described in chapter 5, there have been too many examples of law-breaking going unpunished. In addition to being unfair, this also encourages future misdeeds. But the rules should demand responsible behavior well beyond abiding by the letter of the law. Many financial relationships inevitably involve unequal positions or asymmetric information, such as those between financial adviser and client. The more powerful or well-informed advisers should be prevented from using that information to exploit their less knowledgeable customers.
- In addition, for regulation to work, regulators must act in the public interest. Their incentives and career opportunities should support such behavior, not undermine it as these opportunities do today.
- Finally, social norms are also important. For too long, society has lionized selfish behavior in the corporate sector and demonized government regulation. We need to appreciate the need for and the value of good regulation.
Simple and consistent: In general, simpler rules are better because they’re commonly less subject to gaming. Simpler regulations make it harder to embed loopholes or special privileges. Simpler regulations will facilitate democratic involvement in the process, because regular citizens will be able to understand and critique them.
Fair and comprehensive: The rules must be fair and enforced in an equitable manner. Regulation also should be comprehensive. All too often, regulation is fragmented and inconsistent. This has allowed for abuse of the process and/or avoidance of oversight.
Democratic and transparent: our government is intended to be “of the people, by the people and for the people”. This principle should apply to regulation as much as to any other governmental activity. The financial regulatory process today is open in structure. New or revised regulations are available for public comment. But in practice it is all-but-impossible for people, or even their representatives, to have meaningful involvement in the process. We present some ideas to change that.
In the remainder of this chapter, we illustrate these four principles and how they could be applied by proposing some examples of better regulations and improvements to the regulatory process.
Responsible and Accountable
When we visit a physician, we have reason to expect that the doctor will give us advice and treatment that is in our best interest. Doctors know more than we do about medicine and health, and we expect them to use that knowledge for our benefit, not to make a profit from us.
Financial companies and the professionals who work for them also have informational advantages over most of their customers. There should be similar expectations for them to put their clients first. In finance, this is called a “fiduciary obligation”. As discussed in chapter 1, financial companies currently sell products. The burden of determining which of these products are attractive or beneficial and how to use them is shouldered almost entirely by the individuals who invest, take out a mortgage, use a credit card, or engage with other financial products. But most individuals do not have the expertise to make those decisions well. And, increasingly, many financial products contain traps in terms of hidden fees, adjustments to payment requirements or other features that can make them toxic to customers. Financial products are supposed to serve a useful purpose but instead, all too often, they are used to take advantage of individuals for the benefit of the company selling the product.
Things do not need to be this way. Financial practitioners should be held to standards as doctors are. They should offer products and advice that are truly helpful to their customers or clients or risk being sued for “malpractice”. Higher minimum standards for behavior need to be enacted legally and via regulation. Fiduciary obligations need to be extended more broadly. For example, mortgage brokers should be legally prevented from selling high-cost products to a borrower who would qualify for a lower-cost alternative. In addition, mortgage brokers should be responsible for fully disclosing all aspects of the loan agreement, including the compensation that they will receive, directly and indirectly, for selling different products.
Lock the revolving door
Financial professionals now move seamlessly between regulatory agencies and financial firms as well as the law firms that represent financial interests. This is insidious in both direct and indirect ways. When regulators see the industry representatives lobbying them as potential employers, it undermines efforts for regulation in the public interest.
Perhaps worse, since many of the staff at regulatory agencies such as the Securities and Exchange Commission (SEC) and at the US Treasury Department previously worked on Wall Street and have friends who still do, their mindset is similar as well. The awful consequence of this system has been described by former regulators Sheila Bair and Neil Barofsky in their excellent booksBull By The Horns and Bailout.
Figure 1 portrays the revolving door between Goldman Sachs and Washington. Similar charts can be made for all of the major financial firms and the lobbyists and law firms that represent them.
This problem should be attacked directly. Sheila Bair has proposed that regulators should be permanently banned from working for the companies they regulated. While a permanent ban may sound onerous, Bair spent most of her career in government, ultimately as Chair of the FDIC, so we respect her judgment that this would be feasible. We also think it can be implemented in ways that will be effective while still attracting capable regulators.
Bair’s point is that locking the revolving door would cause a culture change. People going to work for the government would see it as a career. A permanent ban would attract people who would find government employment a rewarding mix of good compensation and public service–just the sort of attitude we would want in regulators‒rather than what we have today, where working for regulatory agencies is viewed as a stepping stone to a more lucrative job on Wall Street.
Junior regulators need only be subject to a temporary ban of perhaps one year. As people gain tenure and rise in rank, the bans should be lengthened to a few years, and those at the highest levels should be permanently banned from entering private industry. In conjunction with this, the regulatory agencies should be encouraged to hire from within government so that career prospects for regulators would be improved.
There are many insidious effects when people move from Wall Street to Washington. This is particularly true at the highest levels. We were shocked to learn that when Treasury Secretary Jacob Lew left Citicorp to return to Washington, Citigroup paid him a handsome bonus. The bonus specifically rewarded him for moving into a high government position – yet another way for corporations to bias the system in their favor. This is unseemly and should be forbidden
After all, public servants in other parts of the government truly do behave as public servants. The diplomatic corps seems quite professional. Federal judges usually act honorably. Judges have explicit life tenure and foreign service officers hold government posts for long periods. We need to promote similar professionalism in financial regulators. Locking the revolving door would be an important step toward achieving popular regulation.
When malfeasance occurs, those involved need to be held accountable. As described in chapters 2 and 5, there were many crimes during and after the subprime crisis that were not prosecuted. Even when there was clear evidence of wrongdoing, the SEC, the Department of Justice, and/or state Attorneys General made agreements with Wall Street firms that permitted these firms to “neither admit nor deny” wrongdoing. The fines that were imposed were typically woefully inadequate to discourage future misbehavior, and in fact did little more than establish the fee for criminality. 
In addition, fining companies is generally ineffective because it doesn’t sufficiently punish the executives who committed or condoned the wrong-doing and personally benefitted from it.
The SEC has begun, in some cases, to demand that financial firms actually admit to the crimes they have committed. But this is still the exception when it should be the rule. Even in extreme cases, such as HSBC’s admission to years of money-laundering for drug cartels, no criminal charges are pursued. This must change.
Change the culture
Finally, statutory restrictions and prosecutions are necessary but not sufficient. Social and industry norms also play an important role. When Michael Lewis described outrageous behavior on Wall Street in the 1980s in the book Liar’s Poker, he thought it would embarrass people on Wall Street into acting better. Instead, the book was taken as a “how-to” manual! Wall Street became even more brazen in taking advantage of clients, the government, the public, and anyone else they can make a buck from. Society is partly responsible for this since, in addition to money, Wall Street executives get public accolades even when they are caught committing wrongful acts. For instance, JP Morgan CEO Jamie Dimon continues to be respected despite a Senate report that shows he lied to Congress and shareholders. Ina Drew, who headed the JPMorgan unit involved in this deceit, was honored as a respected Barnard alumnus and “one of the most successful women on Wall Street” even after the report became public.
The LIBOR scandal is a window into the corruption in the culture of finance. Hundreds of people, working for dozens of banks around the world, routinely colluded to manipulate interest rate indices for several years. They did this to increase their bonuses, and were profoundly indifferent to the impact this would have on the public and even on the companies they worked for. In fact, this practice was so well accepted that the perpetrators openly discussed it in e-mails.
How could this go on for so long? Ironically, it is the natural outcome of the “rational actor” model  taught in business schools – namely, that the LIBOR manipulators were acting in their own best interest given the incentives they faced and the lack of effective oversight or enforcement.
We need to reject the myth that market forces ultimately work for the common good and that selfish behavior is “doing God’s work” . We should recognize that hedge funds that exploit regulatory loopholes or front-run other investors do not produce any social value but that good regulation does. In order to understand this better, we recommend reading “23 Things They Don’t Tell You About Capitalism” and “What Money Can’t Buy”.
Simple and Consistent
Simplicity is another crucial element of popular regulation. Simpler regulation would reduce the potential for inserting loopholes or special provisions. It would also encourage broader participation in the regulatory process.
We originally advocated the Volcker Rule to prohibit banks from speculating with depositors’ money. In principle we still endorse the idea. But in practice the regulations to implement the rule are thousands of pages long and the process is mired in bureaucracy. What’s worse, the megabanks are manipulating them to their advantage.
Occupy the SEC (OSEC), our sister group within the Occupy movement, has done extraordinary work in an attempt to assure that the regulations are written well and implemented. But their effort is not sufficient because there are dozens of rules being proposed; OSEC is only able to comment on a small fraction of them.
Let’s face it: regulatory complexity serves the interests of the largest banks. First, it provides opportunities for Wall Street lobbyists to insert special provisions and loopholes. Even when the rules are not written specifically to provide advantages to Wall Street, the regulatory burden works to their advantage. The cost and expertise needed to deal with the regulation acts as a barrier to entry for smaller firms and encourages industry concentration.
Require more bank capital
There is a much simpler alternative to the Volcker Rule. In their compelling book The Bankers New Clothes: What’s Wrong with Banking and What to Do about It, Professor Anat Admati and Dr. Martin Hellwig argue for requiring banks to rely much less on borrowed money and to have a larger cushion against losses. Andrew Haldane, Executive Director of the Bank of England, has also called for greatly simplified rules in his “Dog and a Frisbee” speech.
Admati and Hellwig’s proposal is simply to require that banks have a larger cushion between what their assets are worth and what they owe. This would reduce both the risk and the consequences of bank failure. It would go a long way toward ending “too big to fail” and stabilizing the financial system. In addition, as Admati and Hellwig show, it would not be costly to the banks. The only true costs to them would be reducing the “too big to fail”, subsidy and the exploitation of tax preferences given to debt. That would be costly to the banks but beneficial to society.
They also argue for drastic simplification of the rules. While we agree that a simple measure of assets would have done much better in managing the past crisis, it is far from clear that it would be more effective in the next one. No single measure is perfect. What’s more, Goodhart’s Law, proposed by a member of the Bank of England’s Monetary Policy Committee, states that any measure used as a policy tool will lose its effectiveness because banks will configure their assets in ways that exploit the measure’s flaws.
We think the only solution is a belt-and-suspenders approach. That is, there should be multiple and different measures to lessen the banks’ ability to game any single one. While we like the Admati/Hellwig/Haldane proposal for a simple measure, we also think more sophisticated measures should be maintained because any one measure is imperfect, and increasingly so as Goodhart’s Law comes into play. In addition, regulators should have the tools to apply their judgment to address problems as they are recognized.
The approach we recommend should not be burdensome to the banks. As Admati and Hellwig note, many of the banks’ arguments against these proposals have no more substance than the Emperor’s New Clothes. What we recommend is similar to the current regulations except with much higher standards.
As more capital would allow for easing of what the banks consider more intrusive regulations such as the Volcker Rule, it could reduce the overhead of the banks while making the regulation both more effective and more “popular”.
Simple retail products, clear disclosure
Another example of the benefits of simplicity is the progress that the Consumer Finance Protection Bureau (CFPB) has made toward protecting individuals. Anyone who has received a credit card privacy statement may have noticed that they are much clearer. As opposed to many pages of fine print, the salient aspects are now on the first couple of pages in bold type. It makes it clear what the company does with your information, when you can restrict their sharing of your data, and how to do so. While we might want more privacy protection, at least people are made aware of what is being done and can, to a degree, opt out if they wish.
Other credit card and mortgage disclosure language is also being greatly simplified. As the Center for Plain Language has shown, it is possible to write a credit card agreement that a fourth-grader can understand – if you want to. This level of clarity should go a long way toward helping individuals avoid the traps that currently exist in all-too-many financial products.
We also applaud efforts to restrict the use of complex financial instruments. Here too, the CFPB is leading the way. The Qualified Residential Mortgage designation that is applied to simple mortgage structures will encourage their use. While it is still legal to offer the more complex mortgages that created such havoc during the latest crisis, the hurdles to using them are higher compared to simpler instruments. This should discourage their use.
While we have mixed opinions about the Volcker Rule, we do agree with former Fed Chairman Paul Volcker’s statement that the only useful financial innovation of recent decades is the ATM – and as noted in Chapter 1, even that is a mixed blessing. Promoting simpler financial products, simpler regulation, and clearer disclosure is an important part of popular regulation.
Simpler, more open markets
Markets should also be simplified and made more transparent. Forty years ago, most trading was in stocks and took place on public exchanges. Today, derivatives dominate the financial system and trade in opaque over-the-counter markets. Even many products sold to individual investors have become very complex.
Trading should be required to be more public. In addition, there should be review of financial products before they are used. Two professors have proposed an agency that would review products for financial safety and effectiveness, similar to what the Food and Drug Administration does for pharmaceuticals.
Why the parallel? Some financial products are so complex and contain so many hidden traps that it seems clear that they are designed to confuse potential buyers. Creators of new instruments should be required to justify that they serve a useful purpose other than making money for the originators. The “Financial FDA” could outlaw instruments, or it could rule that, like prescription drugs, they can only be used in specific circumstances, or it could allow them to be used more generally.
Fair and Comprehensive
Clearly, fairness is another essential pillar of popular regulation. As part of that, the rules must be comprehensive. For example, it is unjust that practices that are outlawed for credit cards can still exist for pre-paid cards that are foisted on some of the poorest and least powerful members of society.
No off-balance-sheet entities
There are many other areas where incomplete or inconsistent regulations hurt society. One egregious example is the use of “off-balance-sheet” entities. Banks contorted the accounting rules to enable themselves to hold large amounts of mortgage securities and other assets that proved toxic but not list them on their balance sheets. To accomplish this legerdemain, these entities are called “Special Investment Vehicles, or “SIVs”, which are close cousins to the “Special Purpose Vehicles” used extensively by Enron. SIVs misled regulators and investors about the true risk the banks were taking and also circumvented the regulatory controls.While rules for these entities have been tightened up, that is not enough. SIVs should be abolished.
End “regulator shopping”
Another serious problem is the fact that multiple regulators cover similar activities or the same entities. As a result, banks and other financial institutions can often choose their own regulator. It should come as no surprise that they choose the one that is most lax. Even worse, the agencies’ budgets are often, in part, determined by how many companies choose them. This leads to competition among agencies for who can be the most “attractive” regulator‒meaning the most lax!
One of the worst cases was the Office of Thrift Supervision (OTS), which was supposed to be regulating savings and loan companies, actively promoting itself as being “industry-friendly”. As a result, AIG, which was primarily an insurance company, was able to choose the OTS to oversee its London-based Financial Products unit. That is the unit that wrote trillions of dollars in credit guarantees that lead to billions of dollars in losses that were absorbed by US taxpayers in the bailout.
While the OTS has, thankfully, been abolished, there is still enormous regulatory confusion. Both the SEC and the Commodity Futures Trading Commission (CFTC) regulate derivatives. The financial industry is playing these agencies off against each other in order to delay and weaken the rules being implemented as part of Dodd Frank. These two agencies should be combined in order to avoid such practices.
In general, rules need to be written that apply across the board. It is unfair if similar activities are treated differently from a legal, regulatory or tax standpoint. What’s worse, it is an opportunity for what Wall Street calls “regulatory arbitrage” and we call “gaming the system”.
Democratic and Transparent
Democracy is the final pillar of Popular Regulation. Regulation, like all of the US government, is intended to be “of the people, by the people, and for the people”. While this may not be practical in its purest form, we believe that important steps are nonetheless feasible to move closer to this ideal.
We know all too well how the regulatory process is biased toward the financial industry. The banks have billions to put into lobbying, campaign contributions and other efforts to influence the process. The Nation magazine recently described this in an article titled “How Wall Street Defanged Dodd-Frank”. The article noted that the top five organizations lobbying in the public interest, such as Americans for Financial Reform and the Center for Responsible Lending, were out-resourced by more than 20:1 by the top five industry groups.
But even this drastically understates the imbalance. While the top five public-interest groups constitute basically all of the lobbying on behalf of the 99%, there are dozens of corporations and industry groups that are actively lobbying for Wall Street. Between the imbalance of funding and the complexity of the regulatory process, people have been deprived of the right, guaranteed by the First Amendment, to petition the government.
We have a simple proposal to address this. The government should create a fund equal in size to the money industry spends on lobbying to be allocated by the people. Each American resident would be entitled to vote on which organization they want to represent them and the money would be allocated pro rata in accord with these votes. While we recognize that much of this money would go to organizations that we might consider either wasteful or objectionable, we’d counter that waste is part of democracy, as we see already in election campaigns.  The result would be a large increase in funds going to organizations lobbying on behalf of the people.
Direct public involvement
Public involvement in the regulatory process should not be entirely delegated to the peoples’ lobbyists.
There are many other ways that people can participate in, or influence, the regulatory process. People should be more outspoken when they see behavior on the part of regulators or industry that they find outrageous. They should demand that abuses such as Jacob Lew’s payment from Citigroup or HSBC’s being let off for money-laundering be addressed. It may seem that the people’s voice is not heard. Certainly, it is given less weight than it should receive. But there are times when it does have an impact.
One example is the “Crowdsource the Fed” twitter campaign that called for nominations to the Federal Reserve bank boards. Most of the directors of the New York Federal Reserve Bank, and other regional Fed banks, are intended by law to represent the public. But the process had been corrupted.
Simon Johnson and others publicly called attention to this matter  and there was a call to “Crowdsource the Fed” via Twitter. While we cannot make a direct connection, the subsequent appointments were a vast improvement on their predecessors. When JPMorgan Chase CEO Jamie Dimon left the board he was not replaced with another megabanker. And the latest class of appointees includes the founder and director of the Freelancers Union. This is a big step forward from the previous class that included the President of the Metropolitan Museum of Art, whose main credential seems to be the ability to toady to bankers and other NY elite.
There is a very long way to go, but this is evidence that public outcry can have an impact. Entrenched interests always win when the public is silent. We can’t allow that. When the people speak out, there is a possibility for progress.
We agree with many on the political right that the current state of regulation is woeful but we reject their conclusion that regulation should be reduced. Banks can threaten the entire financial system. They can mislead customers. They have been supported by the government even when they made disastrous decisions. Regulation is needed, but not the regulation we have today. Instead we need popular regulation that would protect the 99%.
Our solution is not to get rid of regulations but to fix them. Bringing responsibility, simplicity, fairness and democracy to regulation would go a long way toward making it more effective and equitable. These principles would be mutually-reinforcing. Simpler regulation would facilitate broader involvement in the process. Responsible regulators would be more open to the people’s lobbyists. Comprehensive regulation would be more effective.
Applying these principles would create “popular regulation”. This would be more effective in serving the people’s interest and would not be subject to the disdain that the current regulatory regime both deserves and receives. Most essentially, it would be regulation “of the people, by the people, and for the people”.
The task of fixing the financial process is daunting. None of these proposals will be implemented unless the people demand them. But we should not, under any circumstances, accept the status quo. As long as we struggle, there is hope.
Some people believe that it will take another crisis before the public is sufficiently outraged to pressure public officials to do what is needed. They may be correct, but we think it is a mistake to assume that. There are more than enough financial outrages already to provoke action. Even if it will take another crisis, it is better to start the movement now to lay the groundwork for when the time is ripe.
All we need is the political will. That is where all of us are needed. We must demand that these steps are taken to repair financial regulation and the financial system.
 As Daron Acemoglu and James Robinson discuss in “Why Nations Fail”, (Crown Publishers, 2012), countries sometimes follow policies that are very adverse to the overall economy if doing so benefits those in power. We reluctantly believe that the US may be on that path.
 Ginger Zhe Jin and Phillip Leslie The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards The Quarterly Journal of Economics (2003) 118(2): 409-451 doi:10.1162/003355303321675428, Available at SSRN: http://ssrn.com/abstract=322883.
 We recognize that doctors are far from perfect and this expectation is being eroded. But, it is still considered unethical for doctors to put their own interests ahead of their patients.
 Chapter 26 of Sheila Bair, “Bull by the Horns”, Free Press, 2012
 See “Citigroup’s man goes to the treasury department”, Bloomberg News, February 21,2013 http://www.bloomberg.com/news/2013-02-21/citigroup-s-man-goes-to-the-treasury-department.html.
 Steve Schaefer, “Senate Report Slams JPMorgan For London Whale Debacle” Forbes, March 14, 2013
 LIBOR (the London Interbank Offered Rate is an obscure interest rate but it is extremely widely used in derivatives and other financial agreements. So widely it is thought to be in $350 Trillion worth. This is larger than the entire world economy. See http://en.wikipedia.org/wiki/Libor_scandal
 The “rational actor” model underlies most economic theory. It assumes that people have all the relevant information and act perfectly rationally. As a non-economist, you might think this is self-evident that this is true and not in need of study but it took decades for this to be accepted by many economists. Even today most economists assume rational behavior in their models. This is not so much because they believe it but that it makes it much easier to build models.
George Akerloff and Robert Shiller, “Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism”, Princeton University Press, 2010
 Josh Harkinson, “In a 325-Page SEC Letter, Occupy’s Finance Gurus Take on Wall Street Lobbyists” Mother Jones, February 14, 2012
 Andrew Haldane and Vasileios Madouros, “The dog and the Frisbee” Speech given at the Federal Reserve Bank of Kansas City’s 36th economic policy symposium, August 31, 2012. http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech596.pdf. The title refers to the fact that anticipating the path of a Frisbee is a complex physics problem but that dogs can learn to do so using simple strategies.
 This structure is already in place with the leverage ratio, risk-weighted capital requirements and stress tests. But the leverage ratio and capital requirements are much too low and the stress tests are flawed (especially in Europe). What we recommend is basically to make the current structure more effective.
 Another proposal we are sympathetic to is to reinstate the restrictions on banking that were in place under Glass-Steagall from the 1930s until the 1990s. Senators Warren, Cantwell, King and McCain have introduced a bill to do so. However, we are concerned that implementing this will be difficult and that there are systemic risks outside the banking industry that it would not address. Overall, while we don’t object to reinstating Glass-Steagall, we believe that it is essential to reduce leverage throughout the financial system, as increased capital requirements would do.
 A similar idea was proposed here: Eric Posner and E. Glen Weyl “An FDA for Financial Innovation: Applying the Insurable Interest Doctrine to 21st Century Financial Markets”, June 4, 2012 but our idea is different and more truly analogous to the FDA.
 Jessica Silver-Greenberg and Stephanie Clifford “As Pay Cards Replace Paychecks, Bank Fees Hurt Workers” New York Times, June 30, 2013 http://www.nytimes.com/2013/07/01/business/as-pay-cards-replace-paychecks-bank-fees-hurt-workers.html
 See Simon Johnson and James Kwak, “13 Bankers”, Pantheon Press, 2010, chapter 4.
 Gary Rivlin, “How Wall Street Defanged Dodd Frank”, The Nation Magazine, April 30, 2013
 We realize this is far from perfect. To paraphrase Winston Churchill in a very similar context, it would be the “worst system, except for the one we have now.” We would be happy to hear other suggestions to achieve the same goal.
 We call this the “Peoples Lobbies” not the “Peoples Lobby” to recognize the diversity of voices it would represent.
 Simon Johnson, “Institutional Flaw at the heart of the Federal Reserve, New York Times, Economix blog, Jun 14, 2012. http://economix.blogs.nytimes.com/2012/06/14/an-institutional-flaw-at-the-heart-of-the-federal-reserve/.
 Jonathan Reiss, “Crowdsource the Fed Bank Boards”, Huffington Post, June 14, 2012 http://www.huffingtonpost.com/jonathan-reiss/crowdsource-the-federal-r_b_1598487.html