The SEC fights regulatory overhaul

By Felix Salmon
May 21, 2009

It’s great news, I think, that the SEC’s Mary Schapiro lost no time in pushing back against the new regulatory structure which seems to be emerging in Washington: it means that we’re actually getting somewhere here.

I hope and believe that Schapiro’s campaign won’t get very far, for two reasons: Schapiro personally comes from the financial industry — she was head of the toothless Finra — and therefore hasn’t built up a lot of credibility as a regulator; and the SEC institutionally is unsalvageable in any event.

At the same time, the fact that Schapiro is fighting back so quickly and sharply shows that this plan has a good chance of actually happening — complete with the SEC losing a lot of its present powers. What’s more, Schapiro coming out against reform in this manner only serves to place her in the anti-reform camp — which will weaken her arguments going forward. Elizabeth Warren — the inevitable first head of any new consumer-facing regulator — should be very happy indeed at this development.

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