(Breathing) Hot On The Trail Of The Next Madoff
Meet your regulatory representatives here.
This story may be a bit of an outlier, but it's a good indication of the general level of motivation and incentives at financial regulatory entities (remember, the linked story is about an SEC supervisor). Ben Bernanke insists the financial crisis was caused not by bad monetary policy, but by regulatory failure. Part of his solution: more regulators. This is typical for someone who has never worked a day on Wall Street. Having been a trader at one of the largest firms, I've seen the inherent disdain for regulators and how the financial system ensures that the cops stay a few steps behind the bad guys. Unless you're willing to pay a top attorney at the SEC more than Wall Street pays a freshly minted MBA, it will always be this way.
This story may be a bit of an outlier, but it's a good indication of the general level of motivation and incentives at financial regulatory entities (remember, the linked story is about an SEC supervisor). Ben Bernanke insists the financial crisis was caused not by bad monetary policy, but by regulatory failure. Part of his solution: more regulators. This is typical for someone who has never worked a day on Wall Street. Having been a trader at one of the largest firms, I've seen the inherent disdain for regulators and how the financial system ensures that the cops stay a few steps behind the bad guys. Unless you're willing to pay a top attorney at the SEC more than Wall Street pays a freshly minted MBA, it will always be this way.
posted by The Cunning Realist at Thursday, March 04, 2010
6 Comments:
CR,
I'm a longtime reader and fan, but you're way off base here. This guy has a problem that has nothing to do with motivation or incentives; it's a response to stress as the article indicated. In fact, I will guarantee that there's someone like this (more than one, most likely) on Wall Street. It would be just as unfair to extrapolate the behavior and/or character of all Wall Street traders based on that one example as it is to tar this guy's colleagues at the SEC with the same brush as you have done.
I should make it clear that I do not condone that behavior in either a public or private employee. He deserves whatever punishment is called for under the rules, but also needs help to stop this omni-harmful behavior.
Keep up the otherwise-good work.
Don't you know...he has a sexual addiction like tiger... Just needs a little therapy and he'll be fine. God, I was born in the wrong generation. Lol
Goldhorder,
If by "a little" you mean "a shit-ton" then yes, you are correct, although "fine" certainly is a relative term.
It depends on how you write the law. Just ban all financial innovation. Restricting financial activity to specifically named and described acts and banning anything not specifically permitted could fix the problem.
Of course no one really wants to fix the problem, that is the problem.
It's not the money it's the leadership.
Of course the only thing Wall Street respects is money. Until their big swining dicks start getting lopped off.
If the SEC had some fire and brimstone, real forensic outlook leadership and gave real backing to the troops below then the money thing would fade from view as a causal element in the SEC's pathetic performance.
It will never happen of course. The contempt the elites have for the SEC has satisfyingly self fulfilling result. Just as contempt for manufacturing and the labor required to do it was destroyed in America by an absolute contempt for it by our elites. Which filtered down through the entire culture.
That's all wrong what you're writing.
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