hat Securities and Exchange Commission Chair Mary Schapiro couldn’t say publicly, Arthur Levitt – one of her predecessors – could. Three of Schapiro’s fellow SEC commissioners have refused to go along with attempts to create tougher rules for the $2.6 trillion money market mutual fund industry, prompting Schapiro to halt the agency’s efforts for reform. Levitt bluntly called that development a “national disgrace.”
Levitt’s criticism notwithstanding, it’s fairly safe to say that Schapiro – who has a reputation of blending tough talk with the right combination of political lobbying and horse-trading to be more effective than many of her peers among Washington regulators – did whatever she could to sway the three dissenters. When that didn’t work, she reacted in a way that may yet make overhauling money markets politically contentious enough that the issue won’t just die quietly.
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