With Unclear Successor at SEC, a Look at the Agency’s Recent Failures

By: Thursday November 29, 2012 10:56 am

Mary Miller, a Treasury Department official seen as the expected pick for the next head of the SEC, dropped out of contention yesterday, leaving an unclear path forward. Elisse Walter, who was designated as the new chair, replacing the departing Mary Schapiro, is seen as a stopgap pick. But her elevation to the top slot means that the SEC is one member down on its commission, with a 2-2 split between Democrats and Republicans. This will likely stall out almost all its important initiatives in the coming months until a new commissioner gets nominated and confirmed, and unless the Administration wants to give credence to the theory that they want to tie the bureaucratic hands of a key financial regulator, they need to nominate someone soon.

Speculation has focused not on a career prosecutor or someone with a record of tough oversight of the financial industry, but Sallie Krawcheck, “a longtime Wall Street executive” from Bank of America, and Robert Khuzami, the current head of enforcement.

 

White House Makes Politically Expedient End Run By “Designating” Elisse Walter SEC Chair

By: Monday November 26, 2012 12:50 pm

The White House, in announcing the departure of Mary Schapiro as Chairwoman of the SEC, also took the unusual step of “designating” her replacement – a way to fill the vacancy at the top of the commission without confirmation in the Senate. Elisse Walter, a current commissioner, will replace Schapiro.

Mary Schapiro Steps Down as SEC Chief

By: Monday November 26, 2012 10:26 am

Schapiro’s replacement matters. Simon Johnson kicked this off a few days ago, juxtaposing the bona fides of Treasury Department under secretary for domestic finance Mary Miller (a former mutual fund executive) against former Special Inspector General for TARP Neil Barofsky. There’s no question than an experienced prosecutor like Barofsky would change the SEC’s culture, but there’s almost no chance he will ever hold another job in Washington, as he was specifically told by Herb Allison right at the beginning of his book Bailout.

Financial Regulation Advocates Fighting Bill to Gut Regulatory Agencies

By: Friday November 9, 2012 1:52 pm

Among the other goodies in store for America in the lame duck Congress is a bid to gut financial regulatory and other agencies and set up a process to take away their independent control and subsume them under the power of the executive. The Senate Homeland Security and Governmental Affairs Committee, under the direction of outgoing chair Joe Lieberman, plans to pass the Independent Agency Regulatory Analysis Act, S.3468, out of committee and into a fast track process. Mark Warner, Susan Collins and Rob Portman are the drives forces behind it. Americans for Financial Reform and other groups have raised alarms about it.

Treasury Lowballs Settlement Against Standard Chartered, Despite Large Award to New York Regulator

By: Thursday September 13, 2012 7:15 pm

Several weeks back, Standard Chartered Bank, caught engaging in multiple acts of money laundering, settled with the New York Department of Financial Services for $340 million. At the time I wrote that if the Treasury Department and the other federal regulators cannot get as much from Standard Chartered as the DFS, “it will be completely embarrassing.”

Apparently, Treasury is so in the tank for the banking industry that they have no problem going the embarrassing route.

CFPB Getting Reputation as a Fearsome Regulator

By: Thursday September 13, 2012 2:45 pm

You might have guessed that I don’t have a ton of respect for our nation’s regulatory apparatus, particularly in the finance space. Too often regulators listen to their Wall Street friends over the nuances of the law, are slow to identify abuses and slower still to crack down on them, and when they finally get around to accountability measures, give the lightest slaps on the wrist possible. This makes sense for them, as they wouldn’t want to upset their future employers with rules and regulations and enforcement actions that cut into their profits. The common phrase used is “regulatory capture” – at this point, I’m not sure they have to be captured. Everybody knows the deal.

Banks Want Another Account to Disguise Their Risky Trades

By: Wednesday August 29, 2012 4:20 pm

Whither the Volcker rule? After a flurry of discussion about it in the wake of JPMorgan Chase’s Fail Whale trades, we’ve heard significantly less of late. In fact, regulators blew through a July deadline on finalizing the Volcker rule. The last word we had was that the deadline was pushed back to the end of the year.

More time means more opportunity for big banks to lobby over various exemptions. And that’s just what they’re doing, attempting to take a little loophole they found in the initial language and blow it wide open.

Federal Financial Regulators Getting Around to Investigating Money Laundering, After Being Schooled on Standard Chartered

By: Monday August 20, 2012 2:45 pm

Benjamin Lawsky’s impertinent insistence that Standard Chartered Bank actually did something wrong when it facilitated $250 billion in money laundering has really scrambled the federal regulatory response to similar charges. Because the dirty secret is that practically EVERY big bank may have engaged in similar behavior. And now the regulators, embarrassed into action by Lawsky, have to do their job. The latest target is Deutsche Bank, but note the reference to “several other global banks” in the story.

OCC’s Chief Counsel, Julie Williams, Resigns, Heralding Possible New Era at Bank Regulator

By: Tuesday August 14, 2012 8:00 am

Believe it or not, we may have gotten a better retirement yesterday. Julie Williams, the longtime friend to the banks at the Office of the Comptroller of the Currency (which I call the Office of Bank Advocacy), is retiring after 19 years. Williams, the chief counsel at OCC, led the way on pre-empting state consumer protection laws during the housing bubble, and oversaw the implementation of the sham foreclosure review process.

British Bankers’ Association Got Weekly Calls About Libor Rigging

By: Thursday July 26, 2012 12:36 pm

Why it’s desirable to sustain an industry based almost wholly on fraud escapes me.

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