Originally appeared in MiFID Monitor
Harvey Goldschmid, a member of the board of the Financial Industry Regulatory Authority (Finra) and former Securities and Exchange Commission (SEC) commissioner, has called for wide ranging changes to the regulatory body, including a merger with the Commodity Futures Trading Commission (CFTC). He discussed the matter at a recent conference in New York sponsored by law firm Labaton Sucharow on the future of financial services regulation and told delegates the new administration of the SEC would have to deal with an “enormous morale problem”.
Goldschmid, who is rumoured to be Christopher Cox’s successor, said that there are no grounds for the SEC to be abolished but stressed that it is in need of serious “rehabilitation”. He blamed private sector pressure for rollbacks and the “deregulation mythology” for the recent financial crisis, as well as the run down state of the SEC’s risk assessment capabilities.
In order to tackle the challenges of this economic downturn, the US government needs to develop a centralised institution in order to monitor risk in the market, said Goldschmid. He suggested that the CFTC be subsumed into the SEC, which could then become a much larger and more powerful organisation. “Renew and revitalize, but don’t dismantle,” he concluded.