I am uncertain that more regulations are going to work. Some smart people spend a lot of time finding ways around the laws and regulations they do not like.
Financial institutions are owned by their multitude of stockholders who ALWAYS vote for the current management.
Stockholders also vote with their feet, selling stock based on the quarterly earning statements. Computer trading advice programs have made this problem acutely worse, as the programs just look at the numbers and not at the actual health of the company.
CEOs now make the majority of their earnings from stock options, so they REALLY want to keep the price of stock rising.
In order to keep the price of stock rising, it is VERY TEMPTING to deliberately make a bad decision that makes short term profit, but causes long term problems.
I strongly believe that this problem could be solved by my longer and longest term capital gain idea.
To recap that idea:
In order to get everyone to make better long term financial decisions, we need to encourage people to hold their stock for a long time. I believe that people do incredibly stupid things in order to save taxes. So let's get people to make smart decisions in order to save taxes.
We add longer and longest terms capital gains to our tax code.
Longer term capital gain will be stock that is held for between 5 and 10 years.
If the taxpayer sells the stock at a profit after 5 years, the taxpayer pays only 50% of the then current long term capital gains tax. This will be called longer term capital gains.
If the taxpayer sells the stock at a profit after 10 years, the taxpayer pays no capital gains tax at all. This will be called longest term capital gains.
Between 5 and 10 years, the taxpayer will pay based on the number of days that (s)he held the stock. For each day beyond 5 years, the taxpayer pays capital gains tax on a prorated basis based on the actual number of days (s)he held the stock. For instance, stock held for 6 years will be taxed at 40% of the then current long term capital gains tax.
It is important to allow people to decide how long they want to keep the stock for the 5 through 10 year period. Otherwise we will have a huge sale of stock at the end of the first period of longest term capital gains.
I REALLY BELIEVE that this will help make our businesses, our country, and the world a better place. We MUST STOP the insane short term decisions that our businesses are making.
As my grandmother would say, "You catch more flies with honey than with vinegar."