The free market, unregulated capitalism in America during the past two decades has caused a lot of damage to the global economy. It has created sub-prime mortgages, which were then packaged into collateralised debt obligations (CDOs) and backed by credit default swaps (CDSs) and dubious credit ratings and sold all over the world. It created a big, unsustainable bubble in housing prices, which has since collapsed, causing the biggest financial crisis in several decades.
In spite of its shortcomings, there are redemptive features in the American system. The poltical leaders have realized their mistakes and are enacting new laws to protect consumers, taxpayers and to stop the predatory practices.
Their state attorney generals are willing to step forward and take action on behalf of consumers to address cases where financial institutions could have broken the law in misrepresenting products to consumers or were negligent in giving bad advice. In many cases, the financial institutions were willing to settle the cases out of court and to compensate the consumers. The financial institutions knew that they had acted wrongly and that they are likely to be found guilty by the American system of justice.
Many consumers in Singapore have suffered similar damages on similar products sold in Singapore. It is possible for the Attorney General's office in Singapore to take a similar measure on behalf of these consumers who are not able to engage their own lawyers (at unaffordable fees). Their only recourse was through FIDREC (dispute resolution), but the outcome had been tedious and long and usually unsatisfactory. They have to bear their losses silently (as public protests are not allowed).
The poor level of consumer protection in Singapore will cause long term damage to our reputation as a financial hub. I hope that this serious shortcoming can be addressed before it causes irrepairable damage.
Tan Kin Lian
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01/10 - 01/17
- Tax the big banks
- Buy insurance up to age 60
- Big pay packets in Wall Street
- Life insurance for family protection
- Buying Term Insurance from America
- Financial Inquiry Commission
- Educating our young - views posted in survey
- Unemployment in Singapore
- Speech by Franklin D Roosevelt
- Utopia of welfare corporatism
- Prices of HDB Flats
- Survey - Educating the Young
- Sports Hub to be ready by 2015
- US Congress inquiry into the Financial Crisis
- Authorities act on money lenders
- Rechargeable torchlight for use in hotels
- Magic of the Shape Quiz
- Investment principles for 2010 and beyond
- Adapting to the competitive school environment
- Excesses and redemption
- Educating our young
- Capitalism and socialism
- HDB flats and population growth
- Learning from Europe - social democracy works
- Term insurance - buy directly
- More jobs in health care sector
- Economic recovery depends on government stimulus
- Regular savings in a bank
- HK: Bank staff did not understand mini-bonds
- Walk away from your mortgage
- Benefit illustration - Life or Investment Linked P...
- Students and young people should avoid saving in l...
- Dhanabalan: Bubble in bets on events
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