Two stories caught my eye today, both related to our financial markets. One was about the merger of a European and US derivatives exchange that may require SEC approval. The other was a story about the Obama administration requesting additional funding for the SEC.
For a very long time, I’ve been saying that blaming the FED for the melt-down of the financial markets was silly, unless the SEC shared in the blame. The Fed is primarily charged with regulating some commercial banks in order to keep inflation in check and the financial system healthy. Their mission became a little fuzzy when investment banks and commercial banks started looking a lot alike. So, it is no surprise that journalists started simplifying their writing to use the generic term “bank” regardless of its traditional business lines. On the other hand, the SEC is charged with protecting investors and making sure that public financial markets are sound.
For years the SEC has been under staffed and underfunded. The budget submitted by President Obama yesterday proposes a 28% increase in funding for the SEC. Republicans, on the other hand, want to slash funding to the agency. The SEC was charged with implementing some of the financial reforms mandated by the last Congress in a bill sponsored by Dodd in the Senate and Frank in the House. But the increase recommended by Obama for 2011 has never passed, in part because the 2011 budget has never passed. The head of the SEC, Mary Shapiro, says that they don’t have enough money to do their job.
Shapiro estimates that it will take an additional 800 employees to implement the new regulations in the Dodd-Frank bill. The Los Angeles Times reports: Schapiro testified last summer that the SEC needed to hire 800 more employees to implement new regulations called for in the Dodd-Frank financial overhaul law. She said Friday that the lack of additional money has "hampered our ability to do what investors and capital markets deserve."
So nothing new here. The SEC is still under staffed and underfunded. But you have to wonder who the Republicans represent. It seems that they don’t support protections for consumers or protections for investors or stable financial markets. I think they’ve gone stark raving mad.
Homework
Deutsche Boerse & NYSE
Mission of Federal Reserve Bank System
Mission of SEC
Obama's Budget Increases Funding for the SEC
Mary Shapiro Talks About the SEC Budget
Summary of Dodd Frank Bill
For a very long time, I’ve been saying that blaming the FED for the melt-down of the financial markets was silly, unless the SEC shared in the blame. The Fed is primarily charged with regulating some commercial banks in order to keep inflation in check and the financial system healthy. Their mission became a little fuzzy when investment banks and commercial banks started looking a lot alike. So, it is no surprise that journalists started simplifying their writing to use the generic term “bank” regardless of its traditional business lines. On the other hand, the SEC is charged with protecting investors and making sure that public financial markets are sound.
For years the SEC has been under staffed and underfunded. The budget submitted by President Obama yesterday proposes a 28% increase in funding for the SEC. Republicans, on the other hand, want to slash funding to the agency. The SEC was charged with implementing some of the financial reforms mandated by the last Congress in a bill sponsored by Dodd in the Senate and Frank in the House. But the increase recommended by Obama for 2011 has never passed, in part because the 2011 budget has never passed. The head of the SEC, Mary Shapiro, says that they don’t have enough money to do their job.
Shapiro estimates that it will take an additional 800 employees to implement the new regulations in the Dodd-Frank bill. The Los Angeles Times reports: Schapiro testified last summer that the SEC needed to hire 800 more employees to implement new regulations called for in the Dodd-Frank financial overhaul law. She said Friday that the lack of additional money has "hampered our ability to do what investors and capital markets deserve."
So nothing new here. The SEC is still under staffed and underfunded. But you have to wonder who the Republicans represent. It seems that they don’t support protections for consumers or protections for investors or stable financial markets. I think they’ve gone stark raving mad.
Homework
Deutsche Boerse & NYSE
Mission of Federal Reserve Bank System
Mission of SEC
Obama's Budget Increases Funding for the SEC
Mary Shapiro Talks About the SEC Budget
Summary of Dodd Frank Bill
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