Drastic reforms needed on Wall Street

Published 10:00 pm Saturday, September 27, 2008

Dear Editor:

Not that long ago Japan went into a decade long recession because banks made loans to companies that could never be repaid and never should have been made. We did not learn from that!

Drastic reforms are needed to clean up Wall Street. There must be an end to naked short selling. Derivatives trading must be severely limited if not totally ended as it has no basis in real assets and is simply gambling with investor monies. CEO compensation should not be limited so much as it should be based upon performance — long term performance not annual performance. Focus on annual performance creates too much of an incentive for excessive and unwise risk taking.

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Wall Street must get back to earning money and away from gambling. Investors may not see 20 and 30 percent returns again but they won’t see huge busts and the kind of loses we are seeing now either!

Michael Mullen