Eugene Scalia Quotes

Money never seems to be interested in strengthening regulatory agencies, for example, but always in subverting them, in making them miss the danger signs in coal mines and in derivatives trading and in deep-sea oil wells.

The SEC got more than 100 rules to write under Dodd-Frank, the lion's share of all the agencies. And we've moved, I think, with a tremendous sense of urgency. But it takes a long time to write rules and get them approved by a five-member commission.

It's the FSA and its plethora of EU bodies that's failed.

Ordinarily, the feds piggyback on the S.E.C. in complicated financial cases, but history proves that breath-holding on that score is a dangerous endeavor.

The Consumer Finance Protection Bureau supposedly exists to protect you, but instead it tries to micromanage your everyday life.

Financial regulators should be particularly attentive to the financial consequences of their actions.

Despite its heightened duty, at times the SEC has been inattentive to economic analysis.

Washington told Wall Street, 'We're going to let y'all regulate yourselves.' The Republicans were in charge. They never said a word.

You have safety and soundness as primary purpose of the Federal Reserve, the OCC, and the other agencies which control banking regulation.

I mean, everyone agrees with stress tests for banks. I mean that's clear. But banks should do that on their own. And they should worry about their own capital functioning. That's what they should do. It shouldn't be a government function.

Banking, I would argue, is the most heavily regulated industry in the world. Regulations don't solve things. Supervision solves things.

If you want to change the way your banking system is regulated, if you want to learn the mistakes of what's gone wrong, then you have to change your government.

There's a lot of talk coming from Citigroup about how Dodd-Frank isn't perfect. Let me say this to anyone who is listening at Citi: I agree with you. Dodd-Frank isn't perfect. It should have broken you into pieces.

You can look at what I did in the Senate. I did introduce legislation to rein in compensation. I looked at ways that the shareholders would have more control over what was going on in that arena. And specifically said to Wall Street, that what they were doing in the mortgage market was bringing our country down.

Regulation has crept up on us steadily…. The most alarming feature of this concentration of power in the Federal government is the creation of omnipotent commissions to exercise it. The new fields of Federal control are administered by small Boards or executive commissions, usually appointed by the President and responsible to no one but the President. They are part of the Executive Department. But their function is not executive only. They have two additional functions: one is legislative, the other is judicial. These commissions write the rules which make the laws effective. Then they administer the rules; and when the rules are violated, they it in judgment on the violations.

They not only deregulated. They desupervised.

The Commission concludes that the banking supervisors failed to adequately and proactively identify and police the weaknesses of the banks and thrifts or their poor corporate governance and risk management, often maintaining satisfactory ratings on institutions until just before their collapse. This failure was caused by many factors, including beliefs that regulation was unduly burdensome, that financial institutions were capable of self-regulation, and that regulators should not interfere with activities reported as profitable.

Federal and state rules required or encouraged financial firms and some institutional investors to make investments based on the ratings of credit rating agencies, leading to undue reliance on those ratings. However, the rating agencies were not adequately regulated by the Securities and Exchange Commission or any other regulator to ensure the quality and accuracy of their ratings. Moody’s, the Commission’s case study in this area, relied on flawed and outdated models to issue erroneous ratings on mortgage-related securities, failed to perform meaningful due diligence on the assets underlying the securities, and continued to rely on those models even after it became obvious that the models were wrong.

… a federal industrial commission comparable to the Interstate Commerce Commission and the protection of the people from concerns offering worthless investments under highly colored and specious appearances

If the large banks can do this without breaking the rules, then the rules should be revamped.

My experiences with … SEC officials proved to be a systemic disappointment and led me to conclude that the SEC securities lawyers, if only through their investigative ineptitude and financial illiteracy, colluded to maintain large frauds such as the one to which Madoff later confessed.

Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief

… attempting to supervise the financial sector is a fool’s errand

Dodd-Frank greatly expanded the regulatory reach of the Federal Reserve. It did not, however, examine whether it was correctly structured to account for these new and expansive powers. Therefore, the Committee will be examining the appropriateness of the Fed's current structure in a post Dodd-Frank world.

It is wrong when we, in effect, throw safe and sound financial institutions into the same category with banks and lenders that climbed too far out on a limb with no way to return.