The haters won’t admit it, but we continue to see evidence of a more rigorous effort at financial regulation from the Obama administration in the second term as settlements talks with JP Morgan are being held up by the Securities and Exchange Commission insisting on an admission of wrongdoing in the London Whale matter. Mary Joe White, the new SEC chief appointed at the beginning of the year, has vowed to put an end to settlements in which the perpetrators “neither admit nor deny” that they’ve done anything wrong, and we see her sticking to her guns.
As I said at the time, this strikes me as an important change of posture in terms of institutional culture. There’s a difference between a regulatory agency that sees itself as as prosecuting wrongdoers versus one that sees itself as doing a kind of fussy checkbox compliance. White, a former criminal prosecutor, is trying to make it more the former.