Arguments for and against as US bodies scrabble for top slot
The FT’s Lex column speculates on whether or not the Federal Deposit Insurance Corporation (FDIC), which appears to be a front-runner to be a US super-regulator, is best suited for the task.
In favour:
- The Securities and Exchange Commission is discredited
- Sheila Bair, chairman of the FDIC, has argued for a leading role
- Blair proposed a council to monitor systemic risk, wrong-footing the Federal Reserve
- 75 years of experience with insolvent bank subsidiaries, dispatching management and auctioning assets.
- Trusted household name
- Already pulled into numerous bail-outs and guarantee programmes
But:
- Could undermine its good work by dabbling in higher risk activities
- Of all US regulators, it has already strayed furthest from its core mission
- Fed has better knowledge of complex bank holding companies.
