Hope for change but faces are the same so far in finance

This Thursday Mary L. Schapiro will face confirmation hearings as the new chair of the SEC, a real hot seat these days. The SEC has proved itself to be an inept overseer of Wall Street and some are even calling for its dissolution. The problems at the SEC are typical of agencies charged with Wall Street oversight: Staff that is less well-paid and often less experienced than the executives they supervise. Not long ago I spoke to an exasperated senior banking official who complained about how he needed to carefully walk the examiners crawling all over this institution. The examiners just weren’t up to speed. His regulators happen to come from the OCC. But you could just as easily have substituted SEC.

Mary Schapiro comes from FINRA, the regulatory entity that emerged from the merger of NASD and NYSE a few years back. NYTimes quotes insiders who give her kudos for her management style at FINRA and in previous regulatory posts where they said she was willing to shake things up. Yet under her watch Madoff prospered and Wall Street took on unconscionable risks. The Times story also describes questions about whether or not she is a real straight-shooter, especially vis-a-vis her roll in the NASD-NYSE regulatory merger.

So far, Schapiro’s lawyers have fought to keep details of the merger campaign under wraps. Not a very good sign for the future SEC leader and for transparency in the markets. Of course, as we know by now, transparency isn’t everything. Common sense applied to what you see is equally important. But we do need both.

President-elect Obama has shown that he is opting for experience over new faces in his cabinet and agency nominations. For Wall Street, one can’t help wonder whether a new face from the private side might be more useful. Schapiro may be a competent administrator — but don’t we need a little something more for this crisis?

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One thought on “Hope for change but faces are the same so far in finance

  1. Pingback: » Hope for change but faces are the same so far in finance

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