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Posts Tagged ‘costs and benefits of financial politics’

Erik Sirri and the Costs of a Politicized SEC

Posted by Larry Doyle on March 31st, 2010 6:27 AM |

When the exchange of financial ideas and, more importantly, capital becomes excessively politicized there are very real costs. Although those involved in the politicization process of these markets and exchanges may define the increased intervention of political influences as “in the best interests” of all involved, the supposed near term benefits come with long term costs.

Why do I broach this topic? A former SEC official decided he wanted to talk about the political overtones involved in the SEC’s decision to restrict short-selling in the equity markets in 2008. Bloomberg reports on this bombshell in writing, SEC Lets Politics Spur Short-Sale Decision, Sirri Says:

The U.S. Securities and Exchange Commission’s decision to restrict short selling was a political decision rather than one based on evidence, according to a former agency official who says it may set a precedent for future decisions. (more…)






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