Postcards

How the power players do it - by Fortune senior editor at large Patricia Sellers

Krawcheck and Spitzer take on Wall Street

July 30, 2009: 2:05 PM ET

Has Wall Street regulation worked? As a landmark stock-research settlement--requiring brokerages to spend $460 million over five years on reforms--expired this week, the key man behind the deal, Eliot Spitzer, and two experts, former Citigroup (C) CFO Sallie Krawcheck and Fortune's Allan Sloan, convened at CNNMoney's studios to talk about the progress. I sat in on their conversation. You can view segments on CNNMoney by clicking the links at the end of this post or viewing the entire 27-minute video here.

The panelists agreed on one thing: The best evidence that the reforms actually aided individual investors is that we haven't heard much lately about dishonest stock analysts. (Bad research has mainly come out of rating agencies, which have conflicts of interest that need fixing.) That said, as often happens, the reformers did more than needed, ushering in disclosure rules and red tape that have confused consumers more than helped them with their investment choices.

In Krawcheck's view, at least. Spitzer, whose Dudley Do-Right reputation collapsed with the sex scandal that knocked him from the New York governor's post, pushed back. He likens investors who gripe about excessive regulation to patients who leave the hospital after a cure and say, "But you gave me three antibiotics that I didn't need!" Krawcheck liked the analogy. But over lunch yesterday, as she I recapped the roundtable, she said she wished she had replied to Spitzer: "Too many antibiotics make the patient immune."

Krawcheck, who oversaw Citi's global wealth management unit after her CFO stint, says that financial regulation everywhere has become so complex that consumers often don't understand what they're getting, whether they're buying a mortgage (as she did recently) or a mutual fund. "More is not always better. Better is better," she says. Wall Street firms, she contends, purposely create complex products that are practically impossible to understand because they want to confuse competitors--so as to prevent them from copying and gaining ground.

Where is Krawcheck, 44, going next? Since Citi announced her exit last September--following clashes with CEO Vikram Pandit--the banking world's onetime Most Powerful Woman (and Dell (DELL) board member) has been elusive and mostly silent. That's changing. She told me at lunch that she's come close to accepting a couple of jobs--all in financial services--only to decide that they didn't "hit the bulls-eye." Particularly in this treacherous environment, she says, "there's no use rushing."

My bet: Krawcheck will land somewhere--or maybe announce she's starting her own firm--later this year.

PATTIE signature

P.S. Click on these links for part 1, 2, and 3 of CNNMoney anchor Poppy Harlow's interview with Krawcheck, Spitzer and Sloan.

Join the Conversation
Fortune's Most Powerful Women
Fortune's Most Powerful Women For the latest on the most influential women in business, philanthropy, government, and the arts, like us on Facebook.
Guest Posts
Fortune Most Powerful Women Fortune Most Powerful Women The rolodex that redefined power
Profile in The Washington Post
Sheryl Sandberg: Sheryl Sandberg: Don't leave before you leave
COO of Facebook
Wendy Clark Wendy Clark Exec learns firsthand how the homeless live
SVP of the Global Sparkling Brand Center at Coca-Cola
Video
Marissa Mayer's 3 biggest decisions as Yahoo CEO With company stock up over 100% since she began running the company 16 months ago, Mayer reflects on her choices to date. Watch
Chelsea Clinton on running for office: 'I don't know' The vice chairman of the Clinton Foundation talks about her diverse career path and growing up in the spotlight. Watch
About This Author
Pattie Sellers
Pattie Sellers
Senior Editor at Large, Fortune
Executive Director of MPW/Live Content, Time Inc.

Pattie Sellers has written more than 20 Fortune cover stories including "Marissa Mayer: Ready to Rumble at Yahoo," "Muhtar Kent's New Coke," "Oprah's Next Act", "The $100 Billion Woman" (Melinda Gates), and "Gone with the Wind" (Ted Turner). She co-founded Fortune Most Powerful Women and oversees the Fortune MPW Summit, the preeminent gathering of women leaders in business and beyond—and programs such as Fortune MPW Entrepreneurs and the Fortune-U.S. State Department Global Women Leaders Mentoring Partnership. Pattie also develops Live Content across Time Inc. Her blog, Postcards, is about how power players lead and navigate their careers. Pattie won Time Inc.'s prestigious MVP award for her performance in 2012.

Email Pattie Sellers | Welcome to Postcards.
Follow Pattie | email newsletter
MPWomen go Global

The Fortune/U.S. State Department Global Women Leaders Mentoring Partnership brings rising-star women from countries around the world to the U.S. for three-week mentorships with participants of the annual Fortune Most Powerful Women Summit - among them Ursula Burns of Xerox, Laura Lang of Time Inc., Marissa Mayer of Yahoo, and Tory Burch.

Read more

Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.