All I would say is that ultimately the government has to control greed in everyone... Too much of anything is too bad for all. 

Secondly, its all about transparency.

Thirdly, how can the government play the role of being a regulator without affecting market development (Its about markets growth and inclusion) as well.  

Its all how he wants to play about all these is what would be interesting to look at.

V Shunmugam

I think that placing the whole of the blame for our current financial meltdown on recent Wall Street greed - or on the disembodied concept of greed at all - is short sighted, and misses some of the bigger picture of the economic environment that gave rise to the particular incentives that have driven the banking industry to the edge of collapse.

I think primarily that one needs to look very carefully at both the non-commodity currency (fiat) that we use for our medium of exchange, and at the fractional reserve lending system, which (over time) continues to decrease the required deposit amount for issuing loans. When a financial company (regulated by the Federal Reserve bank) has the ability to loan eighteen times what it is required to keep on deposit, the incentive for generating bad loans is very high, because it is possible to use the same deposit amount to generate several good loans, and the losses on the bad loans can be mitigated by the income from the good. Of course, when every company in the industry is doing this, the bad loans can't simply be shifted off to the next company in the list forever, and they soon begin to aggregate - like silt settling at the bottom of a pool. When this happens - things like credit default swaps automatically pop up as savvy investment managers realize that betting some percentage on failure will likely be profitable for them.

Also, because it is legal to be 18x over-leveraged if you are a bank, the total amount on loan comes nowhere near to the amount that the Federal Deposit Insurance Corporation is capitalized to cover. Should every loan fail, all of the money that people have deposited in banks would simply disappear.

The fiat system makes it possible for the treasury to simply print more money whenever the central bank requires it for keeping this hugely over-leveraged system from collapsing under its own weight, since the requirement for having to have an exchangeable commodity on hand is not present. If a dollar bill were worth say, an ounce of silver, then it would not be possible to simply roll the printing press without alternately digging more silver out of the ground (time consuming and costly) or jeopardizing the public's faith in the currency.

Obama's plan for bringing tighter strictures onto the financial industry is going to be less effective than it would be to have the banks regulating themselves, given the right set of incentives - a hard money standard and a full reserve system. The blame for the current state of affairs rests with several different people spread out over the last 100-150 years - Woodrow Wilson, for the creation of the central bank, Franklin Delano Roosevelt, for the removal of American currency from a gold standard followed by the government reclamation of all privately held gold (wholesale theft), John Maynard Keynes, for his General Theory, asserting that an influx of capital (no matter how inflationary) could stimulate a receding economy, Richard M. Nixon, for pulling the country's international exchange off of a gold standard in 1974 (or 1976 - I can't remember), William Clinton, for his creation of the HUD in 1994 with the goal of increasing American home ownership regardless of economic considerations of borrowers (this deliberately reduced loan quality oversight in order to make less qualifying buyers able to get loans), and to a whole line of Fed Chairmen and bank CEOs whose names are obfuscated in history by the policymakers that they influenced.

In short, a new government regulatory body, with all of its costs and bureaucracy is not the answer, and it's not innovative. It's just another cost to add to an already bloated and ineffective system that benefits from these bad financial constructions. There are better answers, but hard decisions need to be made.

I dislike the arbitrary division between the concepts of profit and of need. There is no "need," per se, there is only ever profit, id est, the amount that can be traded for using the surplus of one's own productivity. It is a sticky wicket to start attempting to define a level which is needed and that which is greedy. Of course, I do not treat profit making pejoratively, as making high profits shows both that you have accurately predicted consumer need, and helped to create an incentive for other producers to do likewise. The mental division between a person's profit, and their need is not only arbitrary (especially once one considers different time periods, different family circumstances, etc.), it is a dangerous thought pattern to indulge, because when we start believing that we can set levels on what people "need," then we start feeling entitled to tax away what they don't "need," creating both an incentive problem for producers as well as a classed system. "Need" in this case then becomes a Marxist abstraction, never fully defined because it can't be - consider the difference between what your average 2010 American needs and what your average 1810 American needed.

To address your query, the hard questions that must be addressed revolve mostly around how we may wean our financial system and our horribly over-dependent government off of the addictive drugs of fiat and fractional reserve. I recognize that there is no immediate fix - if I, as emperor, were to institute a full reserve policy and a hard money standard today, real estate values would plummet 90%, banks would simply fold up and shrivel away, investments would all be lost. In short, absolute pandemonium would ensue. However, we must start taking steps toward putting some of the value back into our national economy - like creating a plan to have the reserve percentage increased by 5% per year for the next 10 years. While that would cause interest rates to rise somewhat, it would seriously even out the business cycle (boom/bust - for a very thorough explanation, read Hayek's "Monetary Theory and the Business Cycle").

I also believe it crucial that we cut back on government. Have a look at this link for a decent gut-level look at what government is costing us. Historically, government has never cost as much per person as it does today - even in inflation-normalized dollars. For each tax payer, federal government alone costs about $25,000.00.

I would like to answer in greater detail, but need some sleep. Before I finish, just one more link, possibly the best source for great economics literature. They offer everything in their library for download, or you can order books from them. Econ is more than a pursuit of mine, it is a passion. In my opinion, econ is to the social sciences what mathematics is to physics and chemistry - it comprises the best fundamental tools for understanding human action.

The beautiful thing about a profit driven model is that for any given need, there are some unknown number of entrepreneurs (almost always more than one) working to find the most efficient solutions to fill that need (driven by their own desire for profit). Some of the solutions have the benefit of research, others are the product of pure instinct, and still others are the product of complete accident. Because every solution is only relatively serviceable, there is always room for more than one into every need-niche, and hence the profit incentive remains present for innovation even into "already filled" niches. The presence of multiple solutions in every niche increases competition, driving down consumer cost and improving provider service (to remain competitive).

In any case, regardless of whether a solution has been developed over 10 years through case studies, granular, objective, scientific research, and inductive reasoning, or observed in a drunken vision out of a plate of jalapeno poppers then sketched on a cocktail napkin at the 5-Point Cafe at 4:22 AM... some will fail and others will be wildly successful. As I am sure you know, some 60% of all new business ventures fail, but the rewards for a successful venture are a high enough incentive to keep entrepreneurs returning to the well of innovation again and again.

Central to this truism is the incentive structure of profit - and specifically, profit through providing something that others want, and hence, will pay for of their own volition. This illustrates the essential difference between government and business, one of them is coercively funded while the other is not. Without that price and profit feedback mechanism telling an organization what is wanted and needed, the coercively funded systems are free to malinger in the nadirs of their own uninventive comfort - hence the reason why the passport office is only open from 11-3, still requires physical pictures, and has a 3-week lead time to get an appointment.

I have often heard others argue about the evils of privatization, specifically citing contractors in Iraq who make 10k per month for doing 35 minutes of work, the unsafe and unsanitary state of private prisons, and the behavior of private mercenaries employed by the infamous Blackwater. Of course, the portion of each of the cited exchanges which is "private" is the supply side, while the demand side remains the (coercively funded) government. In econ, it is always the demand which drives the action of the market. Demand is the source of action, and anywhere there is a demand a market will spring up to supply it - even in the face of illegality.

To be clear, I am not an anarchist, I DO believe that government has a place providing things which inhere coercion (such as prisons, police, military, laws), or don't benefit from competition (such as fire protection, or roads - it isn't beneficial to have two competing road systems), but being basically limited to infrastructure and defense. Even then, it is a mistake to have them be the sole arbiters of the scope of their own power (which is the point of the 10th amendment).

Wow... what a rambling post. I should work on getting to the point.