SEC chair Christopher Cox missed the 5am conference call when Ben Bernanke and Hank Paulson decided that the Fed would lend funds to rescue Bear Stearns from bankruptcy, the Wall Street Journal reports on today's front page. The call's time changed and no one bothered to tell Cox, who didn't know until he came into the office a few hours later.
While Cox's underlings were part of the call, the Treasury Secretary and Fed Chairman were apparently content to let him attend other people's birthday parties and Caribbean vacations rather than push for his deeper involvement in orchestrating Bear Stearns's purchase. Cox's placidity has brought his predecessor Arthur Levitt to criticize him for failing to defend the agency's bureaucratic interests.
Privy to the actual time was Tim Geithner, president of the New York Fed and the man who actually set up the conference call. While it's batural that Geithner play a part, being the effective No. 2 at the Federal Reserve, it's a stark contrast to the role of Cox, who wrote off his lack of participation in later discussions with the note that it was "the Fed's money, they were chiefly responsible for the terms."
Cox is unfazed about the apparent slight, although may have avoided publicly complaining because of his own sins, which included failing to tell fellow SEC commissioner Paul Atkins about the crisis while he was overseas. Atkins was reportedly "furious." We figure Cox probably offered a simple explanation, "My phone erased all the saved numbers."*
*Actually an excuse used by Carney when his interns try to contact him.
SEC Chief Under Fire as Fed Seeks Bigger Wall Street Role [Wall Street Journal]
--Senior bureaucratic infighting correspondent Andrew wrote this report.