Bernard Madoff’s Legacy: SEC Could Be Stripped of Some Powers
The Obama administration is considering stripping the Securities and Exchange Commission of some its oversight powers, and shifting that responsibility to the
Jul 31, 2020125.7K Shares5M Views
The Obama administration is considering stripping the Securities and Exchange Commission of some its oversight powers, and shifting that responsibility to the Federal Reserve, Bloomberg reports.
“„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.
In addition to the SEC proposal, the Obama administration also is considering creating a regulatory commission with broad authority over consumer financial products such as mortgages and credit cards, accordingto The Washington Post.
That idea mirrors a proposal of top TARP watchdog Elizabeth Warren,who has long argued for the creation of a Financial Products Safety Commission. The purpose of such a commission would be to provide safeguards so consumers would understand exactly what they were getting into when they signed up for mortgages and credit cards.
As Bloomberg noted, financial regulatory overhaul is likely to spur a tough turf battle, as agencies like the SEC or the Office of Thrift Supervision lose some powers or mergeinto other agencies. And as TWI has pointed out, Warren has become a lightning rod for right-wing critics, who see her as too biased on behalf of consumers.
The fact that the Obama administration is seriously considering her pet project provides a glimpse of which way those in power already are leaning. Score one for Warren, in the long financial regulatory turf war to come.
Dexter Cooke
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Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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