Well-reasoned column in today’s Wall Street Journal by Sen. Charles Schumer (D-NY), “Regulatory Rethink.” This is a compelling point:
Look closely at unifying and simplifying our regulatory structure, perhaps moving toward a single regulator. In this era of global markets and global actors, we cannot return to the older model of separate businesses with separate regulators. We must consider whether a more unified financial regulatory system could provide more efficient regulation. In our report on maintaining the competitiveness of our financial sector, Mayor Michael Bloomberg and I suggested we should look closely at the system now in place in the United Kingdom. They have a single strong, effective financial regulator, focused on results and not rules, with the power to act. Such a regulator would likely have called in Bear Stearns managers and told them to improve their capital position long before the crisis arose, thus avoiding the backdoor action the Fed was forced to take.
Schumer adds a gratuitous knock against the Bush administration’s “hostility” to regulation, even though Treasury has been a consistent advocate of a single regulator for the housing-related GSEs. And the absence of any mention of Sarbanes-Oxley’s excesses jumped out at us.
Still, really good piece.
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