The big players can hire another lawyer and get the regulators for a tennis match at that fancy club while the small players drown in paper.
Ah, and also this: ". As an engineer, when I looked at how the transaction systems work, I was shocked to see few technological safeguards. I imagine there is major fraud activity. Ironically, the bankers and regulators need exactly the technologists that they are pushing away."
I actually imagine that there's remarkably little of the tennis-match corruption you indicate, but I know that there's quite a lot of the over-lawyered corruption. Even worse, there's a lot of completely well-intentioned regulation whose hidden costs drive up prices, while not really providing much in return (related to the old question, 'ever wonder if taxation without representation would have been cheaper?').
Anyone who's dealt with the federal procurement system has to wonder if a little pocket-lining corruption would be cheaper than dealing with the paperwork intended to prevent & detect corruption; anyone dealing with a heavily-regulated industry has to wonder if the regulations cost more than the fraud, waste and abuse they prevent.
those are laws to protect laws placed to protect banks et al long before. the original laws give some state insurance for a very cheap price, which can easily be abused if someone start a bank/union, give lots of loans to a partner and then crash said bank/union. ... which is exactly what the 2008 was about if you stop believing all banks were surprised by the crash...
edit: and yes, they fail mostly at bribes. nobody does business with any government without bribes. maybe he is not such an accomplished banker as he believed if he never got to that part. i know in construction you won't get far without it.
To name two examples from the financial meltdown:
- Lending practices at banks are regulated by the Federal Reserve. Lending practices by mortgage brokers financed by i-banks and hedge funds were essentially unregulated. Those are where a lot of the bad loans and securities started.
- Derivatives are normally regulated by the CFTC, but credit default swaps were specifically exempted from that regulation in 2000, on the assumption that other federal regulators would cover the downstream risks under their purview (they did not).
I'm not trying to be pedantic if you were just speaking in hyperbole, but I'm curious on the methodology for determining that.
I personally consider banking and government in general to be fairly corrupt, but do you have any evidence that literal bribery is common?
It's more a combination of favors, revolving door employment and consideration for friends and family.