Former SEC Chairman Levitt Lays Blame on SEC, Calls for Rejuvenation of Agency

Arthur Levitt, chairman of the SEC from 1993 to 2001, harshly criticized the SEC for what he considers to be its failures in recent years — failures which he believes contributed to the current financial crisis.  In his testimony before the Senate Banking Committee today, Levitt stated that

“As the markets grew larger and more complex — in scope and in products offered — the commission failed to keep pace. As the markets needed more transparency, the SEC allowed opacity to reign. As an overheated market needed a strong referee to rein in dangerously risky behavior, the commission too often remained on the sidelines.”

Levitt recommended that the SEC could be improved by giving it $85 million to rebuild its staffing, by adding investor advocates to the five-member commission, and by enhancing its responsibilities to police financial markets, Reuters reports.  He further testified:

“But let me be clear: a restoration of the SEC to its position from before this current slide is not enough.  At this moment, we need a dramatic rethinking of our financial regulatory architecture — the biggest since the New Deal.”

Levitt’s prepared testimony can be viewed on the video below beginning at the 50:00 mark and running through 57:50.

Read the Reuters article

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