The SEC’s doomed reinvention attempt

By Felix Salmon
June 4, 2009

After reading Zach Goldfarb’s 1,800-word article on Mary Schapiro‘s attempts to rebuild the SEC, I’m more convinced than ever that rebuilding the SEC is a bit like running Citigroup: the organization is too broken, and the job simply can’t be done — by anybody.

All organizations, regulators included, are focused first and foremost on self-perpetuation, so it’s pretty obvious why Schapiro is trying her hardest to make the SEC powerful and relevant. But I see no reason to bet on her succeeding, especially when there doesn’t seem to be anybody in Treasury who is thinking about a revamped SEC as the centerpiece of a new regulatory infrastructure. To the contrary: the SEC was the centerpiece of the old regulatory infrastructure, and failed miserably. It’s time to move on.

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