Tuesday, April 15, 2008

'Wall Streeter Converts to a Fan of Regulation'

Story here.

Robert K. Steel leans forward, speaking in a rapid, excitable burst about the powers that a superregulator might wield over Wall Street one day.

“It will have the license to go everywhere: private equity funds, investment banks, hedge funds,” Mr. Steel, the under secretary of the Treasury for domestic finance, said in an interview last week.

By his words and demeanor, Mr. Steel could be mistaken for a midlevel policy wonk — someone hoping to let a little sunlight disinfect the dark corners of the financial world.

In fact, he is a former vice chairman at Goldman Sachs, the big investment bank. And in the last two years, Mr. Steel has been co-chairman of one commission that claimed heavy-handed regulation was stanching financial innovation and another that argued that hedge funds could police themselves.

His apparent conversion to the merits of regulation illustrates how the laissez-faire bones of the Bush administration have been rattled by the government-brokered rescue of Bear Stearns and the trauma of the credit crisis. . . .

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