Putting risk management in a credible agency.....or not

There are several reasons why it wasn't until last week that a major U.S. bank was found guilty of fraud stemming from the financial crisis. The outrage-inducing first of these is that the banks have simply become "too big to jail"; the Department of Justice has been wary of prosecutions because it feared huge penalties would cause some firms to teeter back towards the edge of collapse in a sequel to 2008.
But another reason is one of resources, or rather, the lack thereof. Going toe to toe with Wall Street's legal machine requires a lot of money that federal regulators, at the moment anyway, just don't have.
 ----n a speech at Harvard University this week, CFTC Chairman Gary Gensler made similar remarks about his agency's lack of resources. "At 675 people, we are only slightly larger than we were 20 years ago. Since then though, Congress gave us the job of overseeing the $400 trillion swaps market, which is more than 10 times the market we oversaw just four years ago. Further, the futures market itself has grown fivefold since the 1990s," he said. "We need more enforcement staff to ensure this vast market actually comes into compliance and go after bad actors in the futures and swaps markets."
While the attempt to defund Obamacare via the appropriations process and then a government shutdown has garnered all the headlines, Republicans have tried a similar trick with the Dodd-Frank financial reform law of 2010, refusing to give regulators the money they need to implement it, slowing down both rule-writing and enforcement. For several years now, in fact, they've shortchanged not just the CFTC but the Securities and Exchange Commission, which also gained new responsibilities under the law.

I find it crazy that in the aftermath of the crisis we would defund the regulators while taking on so much of the risk involved in Wall Street trading.  Talk about moral hazard!!!!

Wall Street Regulators Are Facing a Budget Crisis and Congress Doesn’t Care - Pat Garofalo (usnews.com)