Former SEC Chairman Breeden Disagrees With Treasury Seizure Plan
March 26 2009 - 1:35PM
Dow Jones News
Former Securities and Exchange Commission Chairman Richard
Breeden said Thursday he doesn't like the U.S. Treasury's new plan
to allow the government to seize troubled non-bank financial firms
and suggested the courts should have the power to get involved.
"Capitalism doesn't work if you don't have failures," he told
the Senate Banking Committee.
Breeden, who served as SEC chairman between 1989-1993 under
President George H.W. Bush, said in the case of American
International Group (AIG), which averted collapse with a government
bailout, the best approach would have been to take the "regulated
insurance companies, sell them to other companies and put the
unregulated activities - the swaps and everything else - into a
bankruptcy procedure and wind them down.
"I would urge we spend a little more time looking at the range
of all alternatives rather than just throwing them into the
Treasury Department," he said.
Breeden also said he had concerns about the push in Washington
to create a new systemic risk regulator.
"There is not single person, and no single agency, that can be
omniscient about risk," he said.
"To me, our system is stronger if every agency is responsible
for watching for, and acting to control, systemic risk in its own
area of expertise."
-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634;
sarah.lynch@dowjones.com
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