One can readily imagine other questions that seem more fundamental than those the OFR is now studying: what impact do low interest rates have on the conduct of financial institutions? What is the viability of the municipal and corporate pension plan system in a prolonged low interest rate environment?  (See in this this regard page B1 of today's New York Times as to the likely insolvnecy of a major private pension plan?)  How do the higher costs of financial regulation affect…

Commissioner Gallagher was a thoughtful and serious regulator at the SEC. He took very seriously his responsibility to implement financial regulations that would both protect investors and serve the economy. He was a constant but reasoned critic of the regulatory philosophy that simply argues for "more" (the more regulations, the better). Perhaps the most powerful argument he made against this self-defeating approach was a visual demonstration, represented in a mind-boggling chart, of the…

There is a significant problem with using cases such as this one to "make law." The accused, whom everyone concerned agrees were guilty of fraud, are not presently in a legal position to argue the fine points of precisely how fraudulent their statements were, or what the rules ought to be going forward. Understandably, their main concern is with the level of sanction to be imposed against them.

Undoubtedly, the Commissioners would agree that the use of backtesting presentations for…

From an enforcement standpoint, the issue with self-matching is similar to those faced  with cybersecurity, or with technology issues generally. Everyone involved knows that there will be failures; i.e., that firms will self-match, or will be the victims of cyber breaches, or will have technology failures. Accordingly, it would be clearly improper to criminalize or even penalize failures that are inevitable, and do not result from material negligence. The problem that regulators…