"Commentary"-Ways to Repair Our Financial Regulatory System
Tuesday, June 10, 2008SUSIE GHARIB: Tonight's commentator says, when it comes to the markets, we need smarter regulation. He's Harvey Pitt, former chairman of the Securities and Exchange Commission and CEO of Kalorama Partners.
HARVEY PITT, CEO, KALORAMA PARTNERS: The Bear Stearns meltdown and the sub-prime crisis make it clear our financial regulatory system is broken. Today, we have 51 insurance regulators, 57 for commercial banks, 53 for investment banks and that's just the tip of the regulatory iceberg. We have Federal regulators, state regulators, local regulators, foreign regulators and self-regulators, causing confusion, duplication and even gaps when a crisis hits. Our regulatory systems failed repeatedly over the last few decades, along with the consequences we've all suffered from a system that didn't catch or adequately prevent these crises. Four separate reports have concluded that U.S. capital markets are in danger of losing their preeminent positions in our global economy because our system is viewed as too wooden. The answer is neither more nor less regulation -- it's smarter regulation. Treasury's blueprint for a new regulatory system is the beginning of this analysis. Given the advent of technology that permits instant communications and even faster deal-making, we must start revamping our regulatory system. This won't be done easily or quickly, but it must begin now, before our antiquated regulatory system undermines the inherent vitality of America's capital markets. I'm Harvey Pitt.
