SEC chief: Voluntary regulation a failure

WASHINGTON, Sept. 27 (UPI) -- U.S. Securities Exchange Commission Chairman Christopher Cox, a longtime proponent of deregulation, says lack of oversight helped cause the financial crisis.

Cox made the admission Friday, saying the voluntary regulation program that had been in place to monitor Wall Street's largest investment banks had failed, The New York Times reported.

"The last six months have made it abundantly clear that voluntary regulation does not work," Cox said in a statement, adding that the program had been shut down and authority to regulate investment banks had been transferred to the Federal Reserve.

The program "was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily," the Times reported Cox as saying. "The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate" of the program, he said.

The statement came as the SEC's inspector released a report strongly critical of the agency's monitoring of collapsed investment bank Bear Stearns, the Times said.