The Banking Regulatory System

With the one year anniversary of what Frontline on PBS called "The Meltdown" on Wall Street, reoccurring blame has been placed on the "lax regulation" of Wall Street, which includes investment banks and credit lenders. While the U.S. government decided how to handle the companies involved that were considered "systemic-risk", who had purchased toxic assets that were allowing their companies, along with many others in finance, to thrive. Actions were taken immediately (such as TARP and other federal funded assistance), along with talks of increasing the Federal Reserves powers to assist in future oversight in order to avoid another 'mortgage bubble' that severely shook the U.S economy and our capitalist system.
Lax regulation has been deemed one of the main reasons why the Wall Street collapse starting in September of 2008 occurred, but isn't the only theory that economists and law makers alike pose when analyzing the crux of the collapse; but is amongst the more commonly known.
The question is, how much regulation is needed? Is the fault with the amount of regulation, or does it lie with the quality of the committees and the regulators themselves?
To try and answer that question for ourselves, I've provided a list of just a few regulators that were actively overseeing the financial system during not only the financial collapse of October 2008, but also during the Bernie Madoff "ponzi scheme."

Clicking on the regulators will direct you to their website. Keep in mind that these are all government entities that report to directly to Congress.

Federal Reserve System : which lists its regulatory duties, including (but not limited to):

"Risk-Focused supervision, Supervision of International Operations of U.S. Banking Organizations, and Formation and Activities of Financial Holding Companies."

Federal Deposit Insurance Corporation: Duties which include:

"Examining and supervising financial institutions for safety and soundness and consumer protection"

Office of Comptroller of Currency - Who's stated objective in their website is:

"To improve the efficiency and effectiveness of OCC supervision, including reducing regulatory burden, along with ensuring the safety and soundness of the national banking system."

National Credit Union Administration: Established in 1934 after President Roosevelt signed the Federal Credit Union Act in order to "make credit available and promote thrift through a national system of nonprofit, cooperative credit unions." The NCUA is a:

"Independent federal agency that charters and supervises federal credit unions."

Office of Thrift: This office was also established after the Great Depression in the 1930's to supply "affordable home financing for Americans from all walks of life" that provided mortgage funding for savings associations across the country.

"The OTS is the federal bank regulator and supervisor of a dynamic and diverse industry of savings associations and their subsidiaries spread across the nation."

Federal Financial Institutions Examination Council:

"The Council is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS) and to make recommendations to promote uniformity in the supervision of financial institutions."

Conference of State Bank Supervisors: Founded in the early 1900's to "solve common problems of state bank regulators"

CSBS works to: "Optimize the authority of individual states to determine the activities of their financial institutions."


U.S Securities and Exchange Commission :

"The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisers, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud."

All quotations were taken directly off of the committee's websites.