The WSJ is leading this morning with a story on SEC chairman Chris Cox.
By Cox’s own admission, markets aren’t his game. His area of expertise is corporate law. And by any yardstick, when compared against the pantheon of politicians-cum-regulators of SEC and Wall Street fame/infamy, Cox - in the unflattering light of the last six months at least - has something of the shrinking violet about him.
The problem though, is not the man, but the machine. The SEC lacks the bite to adequately regulate or arbitrate over the problems thrown up by the current crisis: take the monolines for example, regulation of which is beyond the SEC. Add to that Cox’s own reticence in involving the SEC in the market too heavily, and a narrative begins to emerge.
Cox appears weaker still in this context because he shies away from further regulation. On a host of issues, the SEC has lacked clear leadership or clout — leaving other political bodies to steal the limelight or seize the initiative. On rating agencies, for example, the SEC has seen itself bounced by more strident figures on Capitol Hill. And then of course, there’s Bear. As the Journal states:
At pivotal times during the current financial turmoil, Mr. Cox has appeared peripheral… as Fed and Treasury bosses negotiated a bailout [of Bear Stearns], Mr. Cox was at a birthday party. He was missing from a Sunday conference call announcing the sale of Bear Stearns and the Fed’s plan to lend funds to investment banks. The following weekend, he left town for a family vacation.
The story is the same this side of the channel and one the FSA is probably wary of. The SEC’s London counterpart has certainly been proactive of late. Nervous energy perhaps.
Related links
The stock cop - Fortune Magazine profile of Cox
