What the Jets, the SEC, and Credit Unions Have In Common

by Henry Meier

The biggest story in sports over the last couple of days is that Fireman Ed, that famous Jets fan who taught generations of fans how to spell J-E-T-S (after all, Jets fans aren’t too bright otherwise they’d be Giant fans), is hanging up his fireman’s helmet and will no longer lead the cheers at the Jets’ home games.  One of the biggest retirements in finance is that of Mary Shapiro, who will step down as chairwoman of the Securities and Exchange Commission (SEC), a job she has held since 2009.  You may think these two events have nothing in common with each other, let alone credit unions, but you’d be wrong.

First, in 2009 when Shapiro took over at the SEC, the SEC was at dirt bottom.  Despite the fact that almost all the major investment banks and financial products that caused the Great Recession were under the jurisdiction of the SEC, the SEC played absolutely no role in spotting the looming disaster or in managing the crisis.  It needed to be reformed for the sake of the American taxpayer and the American financial system and this was the perfect time to do it.

Also in 2009, like many Jets fans, Fireman Ed thought this was the beginning of a new era.  They hired Rex Ryan, were soon to draft a good, young quarterback, and were moving to a new stadium.

Fast forward to almost four years later.  As an interview in today’s Wall Street Journal makes clear, Shapiro has accomplished almost none of her goals; the Volcker Rule, which stands for the simple proposition that investment banks should be in the business of helping clients and not betting their own money is still not implemented; there still is no clearing house for derivatives and there has been no reform of money markets.  In short, almost all the major reforms that needed to be made to prevent a relapse of the financial crisis have yet to be made.

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