Can the government change the rules of the game?

March 26, 2009 | By Jim Kim

What Tim Geithner is attempting is ambitious to say the least: To change the very rules by which Wall Street plays, essentially creating a whole new Wall Street. He's making a lot of sense--calling for rules to be applied according to function, not from legal forms--but as always the devil will be in the details, which he said will be forthcoming over the next few weeks. There's lots of partisan skeptics of course, but the ambition is refreshing.

He's taking aim at regulating entities that at this point are not able to be regulated. We're talking about the likes of hedge funds, insurance companies that plunged into the CDS market and private equity funds. They would have to register, disclose information about leverage among other things and subject themselves to a risk regulator. Of course, hedge fund registration has been tried before; it failed. Again, it's too early to judge, but many will agree the old order must be blown away.

For more:
- here's a New York Times overview