08/24/2009 05:12 am ET | Updated May 25, 2011

Has Health Care Killed Regulatory Reform?

While everyone was celebrating Dow 9000 and deliberating the potential overhaul to the U.S. health care system, I was depressed. What has happened to regulatory reform?

Yesterday, the Senate Banking Committee heard testimony from FDIC Chair Sheila Bair, SEC Chair Mary Schapiro and Fed Governor Daniel Tarullo on the regulation of risk.

You probably didn't hear much about it, though. As is often the case, the appetite for reform wanes as time passes and conditions improve. Additionally, with lawmakers overwhelmed by the health care debate, they can't seem to focus on another issue concurrently.

You can almost smell it -- the same lamebrain members of Congress who were all too happy to castigate every participant in the crisis don't have the energy to deal with solutions to help prevent the next crisis. That's a shame, because we need smart regulatory reform and we need it soon.

From the beginning of the conversation, I have believed that the administration's plan for regulatory reform is a watered down compromise with too many agencies and scattered oversight. That said, it was a start and now it sure does feel like we're about to get a very weak finish.

We need to harmonize oversight to create regulation that fosters free markets, not free-for-all markets; that monitors systemic risk; ensures the safety and soundness of individual institutions; and oversees business conduct so that investors are protected.

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