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Regulation Topic Number One At Market Conference

At the Securities Industry and Financial Markets Association Annual Meeting, New York.

How nerve-wracking have the market closes become? Plenty! At the Securities Industry and Financial Markets Association conference, in the middle of a debate with CEOs from four of the largest financial firms in the country, an entire room full of securities professionals began nervously checking their BlackBerrys at 3:58 to see how the market was closing.

The room glowed with the cool white of BlackBerrys against black suits, and when everyone saw that the Dow was closing up over 800 points, they began nudging their neighbors to show their screens.

Regulation, but not too much regulation! Please!

Regulation was topic number one at this conference, nowhere more so than on a panel with four financial industry leaders: William Dwyer, President of Independent Advisor Services, Chet Helck, President of Raymond James Financials, William Johnstone, President of Davidson Companies, and Ronald Kruszewski, Chairman of Stifel, Nicolaus.

All four sounded similar themes:

1) We cannot--and do not--have efficient regulators with multiple regulators. Several participants noted that they were regulated by the Fed, by FINRA, by state regulators, and by states attorneys general, who had become "effective regulators." All sought a regulator that was capable of measuring the true risk in the market.

2) There is a real risk that the regulatory burden will be so severe it will stifle innovation in the industry; one participant worried about a "lynching of the financial services industry", another about a "rush to regulate everything."

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3) Ways must be found to effectively limit leverage, that regulators were not even close to keeping up with the development of financial products.

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