SEC to be Seized and Sold Off to the Fed?
A strange suggestion requires a strange headline I guess. This reminds me a bit of the WaMu firesale to JP Morgan using TARP money; burn 'em down, sell 'em off.
When I first saw the headline this morning U.S. May Strip SEC of Powers in Regulatory Overhaul (via Bloomberg) while commuting my bad little Fedwatching butt to the CPA Factory, I was immediately relieved to see that someone was finally doing something about the SEC's raging ineptitude. And then I actually read the article; they want to hand over the SEC's powers to the Federal Reserve?! In Bizarro World, of course, the politicians give away the loot to the thieves.
May 20 (Bloomberg) -- The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization that could be unveiled as soon as next week, people familiar with the matter said.
The proposal, still being drafted, is likely to give the Federal Reserve more authority to supervise financial firms deemed too big to fail. The Fed may inherit some SEC functions, with others going to other agencies, the people said. On the table: giving oversight of mutual funds to a bank regulator or a new agency to police consumer-finance products, two people said.
The 75-year-old SEC, chartered to oversee Wall Street and safeguard investors, has seen its reputation tarnished as some lawmakers blamed it for missing the incipient financial crisis and failing to detect Bernard Madoff’s $65 billion Ponzi scheme. Any move to rein in the agency is likely to provoke a battle in Congress, which would need to approve the changes, and draw the ire of union pension funds and other advocates for shareholders.
“It would be a terrible mistake,” said Stanley Sporkin, a former federal judge and SEC enforcement chief. “Whatever the SEC has done or didn’t do, it is still the premier investor protection agency around.”
Word up, Sporkin! It's a terrible mistake, at least to me, because the Fed is no better equipped to serve as ultimate regulator and in fact should not be extended that sort of power without exposing itself. Just be real about it, if the Fed were to sacrifice its precious independence, perhaps then we can discuss a move like this. Until then? You people must be out of your fucking minds to even suggest such a thing.
SEC Chairman Mary Schapiro’s agency has been mostly absent from negotiations within the administration on the regulatory overhaul, and she has expressed frustration about not being consulted, according to people who have spoken with her. She has pledged to fight any attempt to diminish the SEC, they said.
Treasury Secretary Timothy Geithner was set to discuss proposals to change financial regulations at a dinner last night with National Economic Council Director Lawrence Summers, former Fed Chairman Paul Volcker, ex-SEC Chairman Arthur Levitt and Elizabeth Warren, the Harvard University law professor who heads the congressional watchdog group for the $700 billion Troubled Asset Relief Program.
Excluding Elizabeth Warren, that dinner sounds like a clusterfuck of economic terrorism. So at least we know what is going on here.
Let the power grab continue. Dismantle the SEC and castrate the Fed, don't feed one into the other to create a hybrid monstrosity of regulatory failure! WTF!