If you have children—or have ever had to babysit them—you may understand something that U.S. regulators do not.
Rules can accomplish very little, especially in a vacuum. Tell a bratty kid, “No more cookies” and you may do little more than inspire them to obtain the forbidden treat by any means necessary. You created a challenge and inspired workarounds. Put the cookie jar on a high shelf? No problem. They will just crawl up on a chair, endangering both themselves and all around them.
We are not so blunt or foolish as to compare CEOs and other corporate executives to devious children. We draw the comparison only to underscore the inherent weakness of prescriptive rulemaking.
The United States and its capital markets are stuck on a never-ending seesaw that hops between regulation and deregulation. After a financial crisis hits, regulators act in unison as a modern Sisyphus, taking on the heavy lifting of rulemaking designed to protect investors and the capital... To get the full story, subscribe now.