Tuesday, September 29, 2009
No Ipana For Regulators
"Nothing succeeds like failure, as the saying goes. And nowhere is this dismal truth more evident in our financial regulatory system, one year after the bankruptcy filing of Lehman Brothers. ... Senior regulators who stood idly by for years as financial firms built their houses of cards have been rewarded with even bigger jobs or a jockeying for increased responsibilities. The [Fed], for example, wants to become the financial system's uber-regulator, even though its officials did nothing as banks made deadly decisions to lend recklessly and leverage themselves to the max. Awarding increased power to those who failed in their oversight duties flies in thje face of all notions of accountability. ... Instead of creating more regulations to try to prevent this kind of mess from recurring, why not figure out how to hold regulators accountable when they perform as poorly as they did in recent years? ... It's tough, however, to assign responsibility to regulators who routinely fend off or stymie anyone attempting to scrutinize how the cops on the beat functioned in the years preceeding the financial meltdown. So everyday Americans need to kick and scream if they want some light shed on this critical epoch in our financial history. ... To bring accountability to regulatory performance, Mr. [Edward] Kane suggests that financial supervisors take an oath of office in which they agree to perform four duties. ... To ensure that regulators live up to the promises they make, Mr. Kane suggests that inspectors general at each agency be charged with regularly auditing the performance of financial overseers.", my emphasis, Gretchen Morgenson at the NYT, 13 September 2009, link: http://www.nytimes.com/2009/09/13/business/13gret.html.
This is a job for "Superregulator". What a farce. Kane, are you stupid? CPAs regularly take oaths. So? We take ethics classes. So? The PCAOB "audits" our audits. So? Now with Sarbox, SEC registrants' CEOs and CFOs have new "swearings". So? Agencies like the SEC already have IGs. So? We need no more of this. We need more lawsuits and big shots going to prison. Oath? How about "double double, toil and trouble"? Who will watch the IGs? See Richard Posner's comments at my 31 July 2009 post: http://skepticaltexascpa.blogspot.com/2009/07/legal-philistines.html or Oliver Wendell Holmes at my 10 June 2009 post: http://skepticaltexascpa.blogspot.com/2009/06/understand-law.html, learn from the "bad man".