regulators should be held accountable, they should be fired across the board. If they knew about an ongoing fraud, and they didn’t do anything about it, they don’t deserve to have their jobs.
– Neil Barofsky, quoted in “‘I Hope We See People In Handcuffs’: Neil Barofsky Weighs in on LIBOR scandal”, Yahoo! Finances’ Daily Ticker blog, July 26 2012, article written by Morgan Korn, video interview conducted by Aaron Task (site last visited July 28 2012)
At some point, somebody has to actually do their job.
The Yahoo! video is a good one, only 5 minutes long, well worth watching.
Neil Barofsky’s credentials can be found here. I think I might check out his book Bailout.
If you are a regulator, your job is to make sure people and companies are following the rules. It’s a difficult thing to balance at times, between being too lenient and sympathetic on the one hand, and being too suspicious and untrusting on the other hand.
For an example of too suspicious and untrusting, there’s the January 2012 AgWeek article about OSHA’s enforcement of regulations at grain elevators. which mentions among other things that when current Secretary of Labor got appointed three years ago, the first thing she did was bring in a team that believes more in enforcement, and since then the emphasis (including press releases and changes to existing OSHA policies) has been more on enforcement & penalties, and less on outreach & training.
And for an example of too lenient and sympathetic, there is all of Reckless Endangerment by Morgenson & Rosner, which talks about how many times and in how many ways various government regulators turned a blind eye on the growing housing bubble and problems with mortgage securitization in the 1990s and early 2000s.
(Link to Daily Ticker article found via this post over at Zero Hedge.)