Cyran, Robert. 2009. "Downfall of a Regulator." New York Times (9 April): p. B 2.http://www.breakingviews.com/2009/04/08/OTS.aspx?sg=nytimes
"US financial regulators have spent the last several years in a race to impotence. The clear winner of this chase to the bottom is the Office of Thrift Supervision (OTS), the agency that served as chief financial regulator to a motley crew of credit crunch losers, including Countrywide, Washington Mutual, IndyMac and American International Group. Shuttering OTS would be a good first prize."
"Other regulators haven't exactly covered themselves with glory. In sheer numbers, more small state-chartered banks regulated by the Federal Deposit Insurance Corporation have failed. In size, only the government's determination that Citigroup was too big to fail and must be bailed out prevented the Comptroller of the Currency from winning the gold medal for incompetent regulation."
"But the OTS exhibited the worst symptoms of regulatory capture -- that's to say taking the side of the industry it regulates instead of the public. Some signs are trivial but telling. It called institutions under its oversight "customers". Others are extraordinary. It allowed multiple thrifts, among them failed IndyMac, to backdate capital infusions so that earlier quarterly financial statements looked healthier than they would have done."
More at
http://michaelperelman.wordpress.com/2009/05/21/aig-the-disaster-of-regulator-shopping/
-- Michael Perelman Economics Department California State University Chico, CA 95929
530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com