Despite the fact that I’ve traveled to Las Vegas something on the order of 15 times over the past three years, I’m the furthest thing from a seasoned gambler that you’re likely to see.Not only do my hands tremble almost uncontrollably when I sit down to play a hand or two of blackjack or other games of chance, I’m not very lucky at it to boot. As some wag once told me, “Bill, you probably would have bet Germany and seven points in World War II.”
Yet there’s one bet that I could place with reasonable confidence — the glacial pace of government reform.
In response to what is arguably the most widespread financial crisis in several decades, Treasury Secretary Henry Paulson unveiled the Blueprint for a Modernized Financial Regulatory Structure — a sweeping overhaul of the current regulatory structure that recommends, among other things, merging the Securities and Exchange Commission with the Commodity Futures Trading Commission, and bestowing on the Federal Reserve the overall responsibility of becoming a “market stability regulator.”
The blueprint also envisions establishing a “corporate finance regulator” that would shoulder the responsibility for oversight issues in the public markets while tacking on the SEC’s current responsibilities over corporate disclosures governance and accounting oversight.
Admittedly, that’s a lot to digest. But now comes the hard part: action.
Already, Paulson’s blueprint has come under fire, either from groups who say it doesn’t go far enough in overhauling the system and protecting against the abuses that led to the current problems, and from others who question fueling the Federal Reserve with even greater power.
By now Secretary Paulson is no doubt familiar with the speed with which change is effected in Washington. No doubt, re-arranging the scheduled stops and departure times of the city buses would require several hours of hearings, let alone the time needed to drum up enough support for an enterprise-wide revamp of the regulatory markets.
Paulson’s plan has, however, garnered measures of support from groups such as the Center for Audit Quality and the Securities Industry and Financial Markets Association.
Some of the shorter-term goals of the blueprint, such as establishing a commission to set minimum standards for mortgage brokers, will likely — given the current state of the housing markets — pass without much fanfare. But other aspects, such as the merger of the SEC and the CFTC, are probably DOA, as is the possibility of the SEC abdicating some or all of its authority over accounting practices to the Fed.
There’s no doubt that action on a large scale is needed. Unfortunately, whatever emanates from the Treasury blueprint will likely be a while in coming — particularly in an election year.
And that I’d bet on.
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