Martin O’Malley’s Message for Bankers: Pull Over!
2015-07-10 09:58:32.252 GMT
By Laurence Arnold (Bloomberg)
Under a President Martin O’Malley, the Securities and Exchange Commission would receive an additional $1.7 billion in funding, which should help with replacement laptops and better porn. The president — that’s O’Malley in this scenario, in case you forgot — would personally appoint the SEC enforcement director, the Fed’s general counsel, the New York Fed president and, perhaps, the intern wrangler at Goldman Sachs.
But our favorite part of O’Malley’s 10-page campaign white paper on fixing the ills of Wall Street is his plan for a DMV-style “point’s accrual system to crack down on recidivist banks.” O’Malley borrowed the idea (with proper footnoted attribution) from Joseph Fichera, chief executive of Saber Partners, who proposed it in a New York Times op-ed column in November.
Fichera wrote that the points system for drivers — more for speeding, fewer for running a stop sign, with license suspension for too many points in too short a time — is an effective model for regulating behavior. After the first violation, drivers may not change their behavior much,” he wrote in his op-ed, “but as they near the threshold, they tend to drive more carefully.” Neither Fichera nor O’Malley goes so far as to suggest the specific schedule of violations and points that could guide Wall Street behavior.
Virginia, to take one example, has six-point violations (driving while intoxicated), four-point violations (speeding, up to 19 mph above posted limit) and three-point violations (driving over a fire hose). What might be the finance industry equivalents? Your basic misleading of investors could be three-pointers, while defrauding clients could draw four points. Six points would be reserved for collateralizing debt obligations while intoxicated, or CDOWI.
Regardless, a point system like this would be a welcome alternative to the “neither-admit-nor-deny” financial justice system that’s frustrated so many for so long. Bloomberg’s Phil Mattingly — beyond catching a funny error in the O’Malley white paper — credits the former Maryland governor for compiling a Wall Street reform list that’s so thoroughly wonky. “For groups like Americans for Financial Reform, or Better Markets or the series of high profile, and very knowledgeable, individuals who write regularly on these topics from the left, these are the types of proposals they have been pushing, with Little to no traction inside the Obama administration, for years,” Mattingly writes.
All of this would be momentous — startling, even — if it came from a presidential candidate registering more than 1 percent in the polls.