The Times notes the impending passing of the thrift regulator, which became a poster boy for supine crisis regulation despite the fact that thrifts, as an industry, didn't do particularly badly during the crisis (large thrifts - Countrywide, IndyMac, and Washington Mutual - whose fees comprised a large portion of the thrift regulator's budget, were a different story, but they don't appear to have thrown off the mean).  The Dodd Frank Act will fold it in with the Treasury Department's banking regulator.

You might reasonably ask why we even had separate regulators for banks and thrifts, who did pretty similar things, and it's a good question.  The 1990s S&L crisis was a thrift crisis, after all.  The political economy story might lie in the unitary thrift charter, which was a way that a few nonbanks, like insurance companies and investment banks, got to own a single thrift.  It was their only way into banking, and they liked the thrift charter for that reason.  It meant that an industry in decline held on to its unique regulator for much longer than many people would have predicted.

Administrative Law, Finance | Bookmark

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8345157d569e20133f2455b96970b

Links to weblogs that reference Death of a Regulator: