Professor Bainbridge...on law, politics, religion, culture & food

Reed to cut NYSE board

The WSJ (sub. req'd) is reporting that interim chief John Reed "favors much smaller boards [that the NYSE's current 27 members] as being more effective." He's right that a smaller board will be more effective, for reasons I have blogged previously. Apparently Reed also favors effecting the change by moving some or all of the Wall Street CEOs on the current board into a new advisory board that would lack any oversight of or involvement with the NYSE's regulatory function. IMHO, this is also the right call, as it made no sense for Grasso to be monitored by the very people he regulated. Long term, however, as I have argued before, the best solution is separation of the regulatory and trading functions followed by privitization of the latter.