RationalPolicy
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- Jan 29, 2018
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Financial markets stay open when the government shuts down—so should their regulators : BrookingsThe brief government shutdown exposes a significant flaw in America’s financial regulatory structure: the weakness of our market regulators. When the government shuts down, the two main watchdogs of our financial markets, the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), shut down with it. This is in sharp contrast to bank regulators, like the Federal Reserve and the FDIC, who remain on the job protecting depositors and performing the key role of the central bank. Why the different treatment for two essential government functions in the modern economy?
As a CPA and former auditor of public companies, learning that the SEC and other major financial regulators would shut down with the government was a rude awakening for me. These institutions are critical to keeping financial markets safe, stable, and transparent, and losing their oversight for more than a few days would be seriously problematic. People underestimate the job of keeping companies honest, but it is a 24/7 endeavor, and one that requires regulators and those who work with them to be on their toes. Shutting the system down every time politicians cannot agree on funding (which is seemingly going to be every few weeks now) is not a workable option if we wish to remain the best country to invest in with the most sought after financial markets in the world.