“We have a good deal of comfort about the capital cushions at these firms at the moment.” — Christopher Cox, chairman of the Securities and Exchange Commission, March 11, 2008.
You would think that a man as careless as George Bush would have appointed at least one competent or honest person in eight years, if only by accident. Writing for The New York Times Stephen Labaton exposes the huge role that a single rule change at the S.E.C. played in the collapse of so many financial institutions. It’s actually pretty simple to understand. Urged upon the S.E.C. in 2004 by the big investment banks (Goldman Sachs being represented by CEO Henry M. Paulson Jr., now Secretary of the Treasury) the decision not only loosened the capital rules but left the banks to monitor the riskiness of their investments. The rule change did allow for examination of the parent companies, but since Cox has been at the wheel (he arrived a year later) not a single inspection has been completed.
So, if recent history has taught us anything… medals all round!!!
“You would think that a man as careless as George Bush would have appointed at least one competent or honest person in eight years, if only by accident.”
Oh, Beth. I adore you.