The now-rebranded Office of Thrift Supervision (OTS) wins the award for the least-effective, most thoroughly captured regulator of all time. They were the regulator who ostensibly watched over AIG, as well as IndyMac and a host of other failed institutions. And there have long been allegations that top officials intentionally backdated capital injections so as to make the health of companies under its purview appear healthier.
Those claims are confirmed in a damning report from the Treasury Inspector General.
Bloomberg: It’s “alarming that such high level OTS officials’ were not only aware” of two revisions of the capital recordings, but “directed or authorised the thrifts to backdate the capital contribution,” said Susan Barron, audit director in the Treasury’s Office of Inspector General.
The above picture of regulators taking a chain saw to red tape (via Calculated Risk) was a real photo the agency staged during its heyday, back when deregulation was cool.