[bsirkia]

"I suspect there is only one way to really get trust back. We need to pass strong regulations, embodying norms of good behavior, and appoint bold regulators to enforce them."

Isn't this the exact opposite of trust-building behavior? Trust defined as "a firm belief in the reliability, truth, ability, or strength of someone or something." So the author is arguing for more trust in our regulators and laws, because we can't trust the people we are regulating.

I don't think that you way to build trust with a person or group by creating stiff rules and penalties for cheating, you do that after they've proven they can't be trusted. I think a more convincing conclusion for the article would be something along of the lines of: we've learned our lesson that banks can't be trusted, so we need to impose heavier regulation.

[skybrian]

I think the idea is something like "locks keep honest people honest."

If you make clear rules and get people to follow them, and people see that everyone else is following the rules, that makes following the rules normal and rule-breaking an unusual transgression, even without a panopticon.

It's tricky to pull off, but how else would you do it?

[ams6110]

The main thing we need to do is get back to real, darwinian consequences for stupid behavior. Banks would NOT have made all those "toxic" loans, nor would they have been able to bundle them into derivative products (because nobody would have bought them), if they had been exposed to the real risks they were taking on.

[pbreit]

Are you certain about that? Because I sure am not.

[biff]

My own suspicion is that the laws may be adequate to the task of regulation, but the will to investigate and prosecute bad actors in the financial sector is not. Until the latter issue is fixed there doesn't seem to be much point in addressing the former.

[mortyseinfeld]

The author is trying to sell "trust the government to manage things".

[aslakhellesoy]

That's right. For anyone who believes trust is important to make the wheels go round it should be obvious that in order for the government to be trusted by its people, it must also demonstrate that it trusts the people. Unidirectional trust never lasts long.

If you like fairytales, I can recommend "The emperor's new clothes" by H.C. Andersen.