U.S. Sen. Ted Kaufman (D-Del.) continued his push for more regulatory oversight of the U.S. equity markets by the Securities and Exchange Commission during a speech on the Senate floor Wednesday, Nov. 5.
A little more after a year since the collapse of Lehman Brothers, Wall Street is essentially unchanged, Kaufman said. Trillions of dollars of taxpayer money have gone into bailing out the banks, A.I.G. and a number of financial institutions, not to mention the billions of taxpayer dollars spent to stimulate the economy.
Yet one year later, with no immediate crisis at hand, everyone seems to be falling back into complacency, he said.
Kaufman highlighted what he believes are the “three deadly ingredients” currently present in markets that could lead to another financial debacle: rapid technological developments, a lack of transparency and ineffective regulation that has failed to keep pace with dramatic market changes.
The credit default swap market remains unregulated, he said. The credit rating agencies have not yet been reformed. And the banks are back to their old habits: paying out billions of dollars in bonuses for employees who are still engaged in high-risk, high-reward practices.
The lesson offered by the financial debacle of 2008 is clear, Kaufman said.
“When markets develop rapidly and change dramatically, when they are not regulated, and when they are not fully transparent – it can lead to financial disaster.”
