Regulators, much like the media, tend to overreact to problems when the failure falls at their feet. The media tends to obsess on a story that they initially missed. With regulators, they tend to write proscriptive rules in an attempt to solve a problem that can be partially laid at their doorstep, one in which they missed but in an attempt to deflect blame they create new regulations to prevent the situation from repeating itself.
The MF Global debacle was really a slow motion car crash.
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