THE unsurprising resignation of Mary Schapiro, head of the Securities and Exchange Commission (SEC), announced on November 26th, was followed by an unsurprising flurry of statements dripping with faint praise. True, the financial markets did not collapse during her tenure, and she was more engaged than her disastrous predecessor, Christopher Cox. But those are very low bars.
If the goal of the SEC is to serve as the investor’s advocate, there is not much for Ms Schapiro to crow about. Individual investors have begun bailing out of equity mutual funds. Mutual-fund managers fret that they are losing ground to high-speed traders who, some say, can use their technical wizardry to manipulate prices. Technical failures, most importantly the “flash crash” of May 2010, have raised concerns about market mechanics. Companies are increasingly opting for costly private capital structures rather than paying the even more colossal costs associated with listing on a public exchange.