CFA CALLS FOR COORDINATION ON REGULATORY RESPONSE TO SUB-PRIME CRISIS

Posted March 28, 2008

NEW YORK – The CFA Institute, an association of investment professionals, is calling for better coordination of Congressional and regulatory agency reaction to the sub-prime lending crisis.

“We are confused by the many regulatory comments about reform that are flying around the sub-prime debate,” says Kurt Schacht, Managing Director of the CFA Institute Centre for Financial Market Integrity. “In the heat of the sub-prime crisis, signals seem to be coming from all different directions on what regulation is needed and who should oversee such changes.

“We urge Congressional leaders, regulators, and other industry participants to not jump to change or create new regulation unless we have carefully considered the complex series of events, both in the US and abroad, that led to this crisis,” he adds. “Only then can we make the best judgment on what adjustments are necessary and work with our overseas partners to introduce and implement effective change.”

Schacht calls the current regulatory model inefficient and duplicative, saying it makes oversight and enforcement more difficult. “Ultimately, we should work for a unified regulatory structure that protects investors while fostering market innovation and competitive position,” he says. “Creating the architecture for this long-term, regulatory position within global markets is daunting but overdue.”