I had the opportunity in January to see the outgoing SEC Commissioner Christopher Cox in person. Monday I saw the new SEC commissioner, Troy Paredes, pictured here. Both were Corporate Directors Forum events in San Diego.
What a difference. Christopher Cox, while brilliant, on his way out of office was quite ebullient about how everyone else was responsible for the financial crisis but himself. Now, I am sure in his very upsetting content, there was some truth. No one needs to see Christopher Cox or Troy Paredes to be worried about our United States’ financial security.
That said, the experience of listening to Troy Paredes fostered hope. Not like a strategy, but like a light at the end of a very political, very long tunnel. He didn’t promise miracles. He was thoughtful, saying things like, “This economy brings a historic expansion of government influence on the economy.” “The mission of the SEC is disclosure. Are we asking for the correct disclosures?” “The goal of these changes… is reducing risk. The regulatory regime became too permissive. But even in hardship, we cannot over play the role of regulation.” “We need caution to weigh the costs and benefits and assess the effect of our decisions.” “Regulation to avoid risk is not without costs.” We want to find the “optimal degree of risks, netting costs against benefits.” “Risk is the price we must pay to make room for the entrepreneurial opportunities…”
HOW systemic risk will be managed is a major concern of this new commissioner, more so than WHO will manage it. Now, I don’t know corporate governance like many do, but the questions that were forthcoming from that sizeable Monday morning 7 a.m. crowd had me thinking that we might have a leader we can trust at the SEC.
He has a 5 year gig. Can he stomach the politics? Will he stay true to his very thoughtful approach? We shall see.
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