Fed And SEC To Congess-Choose Me
July 24th, 2008The SEC and Fed were once more in front of a Congressional committee discussing regulation. Today’s hearing centered on investment banks and both entities insisted that they should regulate them. Reuters has a full report, but here are some excerpts.
“But Cox said his agency should oversee investment banks, while Geithner said the Fed must have a direct supervisory role over any firms that borrow from the U.S. central bank.”
“”It’s very important that we have a role in consolidated supervision of these institutions because you will not have good judgments made by this central bank, this Federal Reserve, in the future unless we have the direct knowledge that comes with supervision,” Geithner told the U.S. House of Representatives Financial Services Committee.”
The rise of broad financial services companies, some of which are involved with both commercial and investment banking, has blurred the regulatory lines and reform must establish clear responsibility and authority for overseeing the various types of financial firms, he said.
You can see where this is going, can’t you.The two are going to compete with each other to show how tough they will be. Meanwhile, the investment bankers, who are not going into their first rodeo here, will play one off against the other.
Count on a government solution. Rules and procedures to the extent that an IB will probably need a hall pass to go take a pee, and enough holes to allow them to pretty much continue business as usual.
Tom Lindmark
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