Schapiro faces huge job in reviving SEC
Mary Schapiro, CEO of the Financial Industry Regulatory Authority, speaks after being named by President-elect Barack Obama as his choice to head the U.S. Securities and Exchange Commission during a press conference at the Drake Hotel in Chicago.
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Tess Vigeland: The SEC is not a pretty place to be these days, what with the financial industry imploding, scandals erupting. But Mary Schapiro apparently wants the job of reviving the agency. She previously served as an SEC commissioner and she currently heads up the Financial Industry Regulatory Authority. Schapiro faces a slew of problems at the agency that is supposed to police Wall Street, but increasingly finds itself derided as Keystone Cops. Marketplace's Steve Henn reports.
Steven Henn: The reputation of the Securities and Exchange Commission has been battered in the past year. Charged with sounding the alarm if and when the nation's biggest investment banks were headed for disaster, it failed. This fall, John McCain called for the Commission's Republican chair to resign. And then last week, Bernie Madoff was accused of the biggest financial fraud in American history. Still Mary Schapiro says she wants this job.
Mary Schapiro: Obviously there is much work to be done there.
But what is the job she needs to do? Insiders she'll need to boost moral ? support the enforcement staff and investigators ? while at the same time improving the agency's ability to recognize big risks facing regulated firms. So can Schapiro throw on cape and some tights, and save the SEC?
Hal Scott: No. the problems of this agency run very deep.
Hal Scott is a law professor at Harvard and an expert in capitol market regulation. He says Schapiro's well-qualified but...
Scott: I think we have to create new agency with a different culture to regulate the entire financial system.
Most observers agree America's system of financial regulation is hopelessly fragmented. Here's just a partial list of agencies in this mix. There's the OCC, the OTS, the SEC, the FDIC, the CFTC, and the Fed. Yet even with all those regulators running around Scott says no one is effectively keeping an eye out for big financial risks. And today, Obama said reforming this system would be one of his top priorities.
In Washington, I'm Steve Henn for Marketplace.