Maybe I am feeling cynical today, but I just have to wonder what SEC Chairman William Donaldson is up to. What’s his angle?
He is calling for a “markets overhaul,” including investigation of mutual fund fees and credit rating agencies. Now, he is not talking about the folks like Experian who keep track of whether you are a good credit risk, but rather companies like Moody’s and Standard & Poor (the folks who come up with the S&P 500) who come up with corporate credit ratings. These ratings control the rates at which companies can issue corporate bonds.
In an administration that wants to get rid of “unnecessary regulation” he wants to issue a whole bunch of new regulations.
But, Mr. Donaldson warns, there’s only so much he can do unless Congress gets involved. Ah, now it becomes clear. He would like to crack down on market timing schemes and excessive fees and ways to make sure the traders get the best available prices, and for some reason corporate bond ratings, but he just doesn’t have enough raw power.
Strangely enough, Eliot Spitzer seems to have plenty of authority to deal with most of this stuff. Except the corporate credit rating guys, and frankly I seem to be missing the part where it’s a problem.
Follow up items: Government Official Admits there is No Social Security Crisis: seriously think about the pending bankruptcy reform bill before deciding it is a Bad Thing.