A regulatory overhaul proposed by the Treasury Department won't happen quickly or spell the elimination of the Securities and Exchange Commission, SEC Chairman Christopher Cox told his staff.
Treasury Secretary Henry M. Paulson Jr. released a proposal Monday calling for merging the SEC with the Commodity Futures Trading Commission and expanding the power of the Federal Reserve to oversee investment banks. Such moves would mark the broadest overhaul of financial regulation since the Depression.
"The process involves so many people, businesses, agencies and interests that it will take a very long time," Cox said in an e-mail to his staff obtained by Bloomberg News. "As past reform efforts have shown, in the end it may amount to nothing at all."
The SEC, created after the 1929 stock market crash to restore confidence in financial markets, regulates stock exchanges, securities firms and investment advisors.
Cox, in his memo, said a merger with the Commodity Futures Trading Commission would actually expand the SEC's responsibilities, contrary to "press reports" indicating the Treasury plan would lead to the SEC's elimination.
Should Congress try to change the U.S. regulatory structure, Cox predicted, lawmakers will "keep inviolable the gold standard for investors" that the SEC has "set over the last 74 years."
An SEC spokesman declined to comment on Cox's e-mail.