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The report found a "lack of consistent supervisory oversight" in the case.
The proposal would merge the current federal supervisory oversight of the banking system from four agencies into one new agency.
And although some fret about a tighter regulatory regime, with the Fed likely to impose bank-like "stress tests" from 2014, others see stricter supervisory oversight as a reassuring plus given the group's recent history.AIG certainly has a new-found air of confidence.
There is also broad support for the way regulators have let banks find their own answers to the problems, rather than imposing rules.But the supervisory oversight, as well as the solutions dreamt up by the big dealers, make some people nervous.
Separately, the Basel Committee of international banking supervisors and central banks (which includes senior officials of the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency) have issued for comment revised corporate governance guidelines for risk governance and supervisory oversight of banks in nearly 30 of the world's largest economies.
A System-Wide Approach To Supervisory Oversight The regulation and supervisory oversight of financial institutions is another critical tool for limiting systemic risk.
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Even the best government regulation cannot fully substitute for internal risk management.For supervisory agencies, oversight has to keep pace with innovation.
The bank is evaluating how the new technologies "can create value for advisers and the firm while at the same time having prudent supervisory and compliance oversight," said Paul Fox, head of Merrill Lynch Online Platforms.
"Risk assessments are not consistently applied and an absence of supervisory input, or oversight, results in victims not being given the same level of service across the force".
They are also not allowed to be engaged in the selection and oversight of supervisory personnel.
With protesters still in the streets as part of the Occupy Wall Street protests that have now spread across the country, it is unclear how the SEC's refusal to sack any of those responsible for oversight and supervisory functions regarding Madoff will be received by Wall Street critics.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com