|Rick Santelli, CNBC|
Rick Santelli was in fine form this morning while debating Steve Liesman. The topic was banking reform and Mr. Santelli made a case for an elegantly simple cure -- raise the banks' capital requirements.
Another CNBC commentator chimed in that this is the same risk premium banks require when a homeowner has a marginal credit history -- the bank looks for more cash in the deal -- a bigger down payment to compensate for the risk of default.
Why can't we use the same mechanism to minimize chances of another banking meltdown? Do we need new federal agencies, reams of new regulations, congressional hearings, Barney Frank class warfare speeches and on and on?
Banks just need greater reserves to cover their own risk-taking. I realize such requirements affect profitability, but it beats more government involvement.