Where Bank Regulators Go to Get Rich
Comment of the Day

April 08 2013

Commentary by Eoin Treacy

Where Bank Regulators Go to Get Rich

This article by William B Cohan for Bloomberg may be of interest to subscribers. Here is a section
Mary Schapiro , the former chairman of the Securities and Exchange Commission, must take us for fools.

No need to worry about her and the so-called revolving door between government and Wall Street, she told the Wall Street Journal on April 2, after announcing she would be joining the Promontory Financial Group LLC as a managing director in its Washington office, in charge of its governance and markets practice. “In my case, there's no revolving door,” she said. “I won't ever be going back to government.”

Oh well, then, I guess that makes it OK that four months after leaving the SEC, Schapiro is joining a firm stuffed to the gills with former government financial-services regulators peddling their knowledge of Washington's regulatory thicket to the banks and financial-services companies they once oversaw. (Schapiro, remember, also had a swell incoming trip through the revolving door: She previously ran the Financial Industry Regulatory Authority, Wall Street 's self-appointed watchdog, which paid her a bonus of almost $9 million after she left to go to the SEC in 2009.)

Eoin Treacy's view The ease with which former gamekeepers can turn poacher, once their stint in public office is done, highlights the chasm in the standards of governance that exists in the regulatory framework of a significant number of countries. The USA is not the only country in which this practice is widespread and it reflects a pattern of deteriorating governance that investors quite rightfully find disquieting.

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