Transcripts

"Commentary"-Now May Be The Time For Commission Consolidation

SUSIE GHARIB: In tonight's commentary, consolidating fragmented regulation. Here's Myron Kandel, founding financial editor at CNN.

MYRON KANDEL, FOUNDING FINANCIAL EDITOR, CNN: The current financial crisis has reawakened calls to merger the Securities and Exchange Commission and the Commodity Futures Trading Commission. The massive destruction of values due to the explosive growth and downfall of credit default swaps and other esoteric derivatives that fell between the cracks of existing regulation makes it imperative that a comprehensive regulatory system be developed. The first serious attempt to merge the SEC and the CFTC occurred 20 years ago when the Brady report suggested that split regulatory responsibilities abetted the 1987 stock market crash. But that effort went nowhere, even as incredibly complex new products made that split even more dangerous, as we have now sadly learned. There are serious obstacles to a merger, including the different cultures of the two agencies, the varying interests of their constituents and likely turf battles among congressional oversight committees. And what about the Federal Reserve? I think fragmented regulation must be consolidated into a unified system. But the way to do it is not to rush into a quick fix. Let's take a step back and decide what needs to be regulated. What are the threats to the capital markets, how risk can be evaluated and made transparent and how investors can be protected. We need a non-partisan group to develop a plan that can be implemented in the public interest. The next president should move quickly on this issue. I'm Myron Kandel.