Quote of the Day
I was astounded to learn the other day that AIG had 400 regulators. Four hundred agencies were overseeing AIG… So I think regulators dropped the ball. They completely missed the fact that the company was taking on an enormous amount of risk and in effect taking the economy to its knees.
Critics of U.S. financial regulations will undoubtedly scream that if there had only been 400 additional regulators watching the hen house this all wouldn’t have happened.
This is truly amazing. 400 regulatory agencies? And we’re told that there is too little government?
I agree. This is rather astonishing.
That’s an interesting but meaningless statistic. The vast majority of AIG’s business was the very regulated insurance business. Operating in all 50 states and 100 countries, with multiple lines of insurance, it’s pretty easy to see how there were 400 regulators. I’m surprised the number is that low. The group writing their CDS exposure, that leveraged off the AAA credit rating of the rest of company, was lightly regulated if at all.
Well artk, how many regulatory agencies do you think AIG should report to? Why do I suspect that things would have developed much better for everyone if ther were only one?
Well Tom, since this blog has more then it’s share of 10th Amendment US Sovereignty fetishists, how do you force individual states to relinquish local insurance regulation to a single federal government regulator and how do you convince the US to relinquish it’s insurance regulation to some international regulator (or the regulators of dozens of countries to relinquish authority to US regulators). Besides, the CDS market was and is unregulated. Even today, there’s considerable opposition to it’s regulation.