Democratic commissioner Elisse Walter, who served as acting chairwoman in early 2009, takes over at the helm of the SEC in December.
Elisse Walter will become chair of the Securities and Exchange Commission (SEC), following the departure of Mary Schapiro December 14. Even if it is merely a temporary stay, Walter's installation in the role, which in its rapidity has come as a surprise to some, and does not require US Senate approval because she is already on the Commission, will see more details of her rule-making philosophy emerge in coming days.
Walter's recent posting at the Harvard Law School Forum for Corporate Governance and Financial Regulation gives some indication of her view of financial technology, and global regulators' required affinity for it.
The posting, International Coordination Among Regulators, penned last month on the same day the SEC's technology roundtable, sets out to provide Walter's thoughts on time recently spent as the Commission's representative to the Financial Stability Board (FSB) and the International Organization of Securities Commissions (Iosco).
Setting out to draw a subtle distinction between cross-border “cooperation” and “coordination,” Walter suggests that the answers to regulators' most difficult questions are likely to be found in "bilateral and smaller multilateral dialogues among regulators in key jurisdictions," citing practical limitations of the larger forums mentioned above.
She notes that technology-focused initiatives, such as the unified legal entity identifier (LEI) initiative, are already proving how a collaborative model, driven not only by the Group of Twenty (G20) nations, but also by active engagement with private firms, can be fruitful.
"[The eventual LEI implementation] should lower the cost of data aggregation and reporting. It should also allows private firms to improve their own risk management practices, and to provide better data to financial regulators as we monitor the markets and the financial system," she writes.
That model is expected to grow further, according to Walter. "I expect that the role of technology in the market will lead to a greater level of coordination with non-US regulators. As markets rely more and more on automated systems and become increasingly interconnected, we will need to work together to maintain a reliable and robust market infrastructure, one that is capable of detecting and mitigating risks that technology and automation may bring," she says, seeing similar value in stronger international initiative around systems risk.
As a new cohort of post-crisis officials take the reins, including Mark Carney, also chosen today as the first Canadian to lead the Bank of England—and, soon enough, oversee many of the UK Financial Services Authority’s (FSA’s) responsibilities as well—it will prove interesting to observe how, if at all, technology and global regulatory coordination effectively combine.
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