Budget Constraints May Hamper the Operations of the Securities and Exchange Commission
In the light of the proposed cuts to SEC’s budget by congressional Republicans, Mary Schapiro, the Chairwoman of the Securities and Exchange Commission, on Friday warned that the agency does not have enough funds to sufficiently police Wall Street.
Schapiro also said that there is not enough money to draft several new regulations that are required under the financial reform law.
During a legal conference in Washington, Schapiro said, “It is a strain that is already having an impact on our core mission – separate and apart from the new responsibilities that Congress gave us to regulate derivatives, hedge fund advisers and credit rating agencies.” She also said, “It is a strain that will intensify the longer the budget remains at existing levels.”
SEC has been complaining for a long time that it does not have enough funds to oversee the markets, even though it funnels to the federal government hundreds of millions of dollars in fees. This concern was further amplified by the financial crisis, when the agency was accused of failing to contain the risky behavior of financial chief executives.
For the 2010 fiscal year, which ended last September 30, the budget of the SEC was at $1.2 billion. This is a boost from its $960 million budget in 2009. Although President Obama called for SEC budget to rise to $1.26 billion, it was never passed by Congress.
The attempts of Democrats late last year to provide the SEC and another key regulator, the Commodity Futures Trading Commission, a temporary funding boost was scuttled by the Republican opposition.