The Many Faces of Michael Oxley

Remember Michael Oxley? He's the former Republican congressman from Ohio who joined forces with ex-Sen. Paul Sarbanes to co-author the landmark Sarbanes-Oxley Act in 2002, which sought to halt the kind of supersized corporate fraud that sank Enron and WorldCom, among many others.

For an encore, Oxley has set himself another stern legislative task -- killing the proposed Consumer Financial Protection Agency. Now an attorney with Washington law firm Baker Hostetler, the former lawmaker inveighs against the agency in a piece yesterday in Roll Call. The CFPA, which would shield consumers from predatory lending and other sharp financial practices, will only add to the "alphabetical pile" of financial regulators, he says. And referring to the Obama Administration's plan to appoint what he calls an "overseer" to monitor systemic risk, Oxley says it's time to, like, get over it, already.

However the overseer ultimately is constructed, and whatever powers Congress decides to grant, the overseer must somehow resist the regulatory urge to focus on analyzing what happened in 2007 and 2008.

By contrast, Oxley stumps for the government's plan to form a central clearinghouse for over-the-counter derivatives, perhaps better known as seeds of doom. Oxley, who from 2001 to 2006 was chairman of the House Financial Services Committee, is also a senior adviser to the board of directors of Nasdaq OMX Group. Now, the win-win here is that the stock exchange launched just such a derivatives market earlier this year.

Indeed, Oxley's mission isn't totally slash-and-burn. He comes in peace, bearing nifty solutions. Why, here comes one now:

. . . in its zeal to regulate and to provide a federal solution, Congress should not overlook the power of transparency and natural market forces to provide some of the necessary discipline.