Hacker News Reader

Comment by AnthonyMouse | Hacker News Reader

> For instance, banking and electricity are highly regulated markets, and rightly so.

You don't think banking is dysfunctional? Banking is one of the most privacy-invasive industries in existence, the rules are the reason the internet runs on advertising because they make it nigh impossible to make a functioning anonymous micropayments system and companies that try to innovate with e.g. a debit card that keeps your account balance invested in securities get booed off the stage by incumbents who don't want the competition.

View on HN

It is a matter of "less dysfunctional with regulation" as opposed to not being dysfunctional with regulation unfortunately.

There are a lot of legitimate things to complain about with banking and its regulations but despite the many misconduct scandals in banking they are still better than unregulated parabanks. The scandals haven't been in the form of "and the head ran off with all of the money and nobody can find it or them".

Regulations certainly could be improved in multiple directions but dysfunction is not a binary.

I like this discussion a lot, because I agree that the regulations are pretty dumb, but I can't imagine a world without regulations that yields superior outcomes.

What kinds of improvements would improve the state of banking today that don't also throw the baby out with the bathwater?

The biggest improvement they could make would be to create a class of accounts intended to never have a large enough account balance to be capable of incurring severe losses, and then waive most of the regulations for those accounts. Then you use the regulated accounts for your retirement savings, but keep a hundred bucks in an unregulated one to use for buying stuff on the internet, which could then be completely anonymous and have minimal transaction fees.

And what's to stop me creating thousands of these anonymous unregulated accounts to launder money? There are a lot of aspects to regulating the financial industry that have to account for the many different scenarios involved. The regulations for the finance industry aren't perfect but it is an incredibly difficult balance to strike.

What stops you from doing the same thing with cash and cash businesses? Nothing, why is why AML rules are pointless and should be abandoned because they're doing dramatically more harm than good.

Reply on news.ycombinator.com