Financial regulators must be committed to promoting policies that are good for consumers, investors and the U.S. capital markets. The financial crisis has demonstrated, however, that regulators lacked the knowledge and resources needed to respond flexibly to rapid financial innovation and market expansion. Poor funding and a lack of independence clearly helped to undermine vigorous regulatory oversight.
The ups and downs of the Congressional appropriations process have served to especially undermine the regulatory mission of the SEC. That is why the Council strongly supports self-funding for the SEC. The SEC, unlike most other federal financial regulators that are self-funded, has been buffeted repeatedly by changes in the political winds. Self-funding is critical so the SEC can plan for the long term and be better able to respond to future unknown risks. Self-funding would further ensure that the commission has a workforce of sufficient size and skill to oversee the nation’s securities markets, including potential expansion into areas such as OTC derivatives and private fund advisers.