Securities and Exchange Commission Historical Society

The Imperial SEC? - Foreign Policy and the Internationalization of the Securities Markets, 1934-1990

End of the Cold War

Fall of the Berlin Wall

"The focus of the U.S. government, with the fall of the Berlin Wall, was on trying to help these markets emerge and develop. There was no real concern in the United States that there was going to be a lot of market abuse aimed at the U.S. from Hungary. The concern was that as this market developed…that it would be better to have the Hungarians looking to the United States for technical assistance, than looking to Europe or somewhere else. There would be great advantage to support and develop those markets so that they could align with the American market, not just in terms of cooperation, but in terms of the whole legal scheme being developed."

- June 13, 2005 Interview with Michael Mann

As the Berlin Wall fell and as communism, as an economic system, came crashing down, the SEC stood ready to provide technical assistance in creating markets and market regulation in Eastern European countries. Months before the fall of the wall, SEC Chairman Richard Breeden had established the Office for International Affairs.

The Office of International Affairs was to act as a central coordinator for the multiple international issues that various parts of the SEC dealt with, including market regulation and corporate finance. In many ways, the OIA represented the SEC coming full circle as Michael Mann, the first director of OIA, began playing the role that Walter C. Louchheim, Jr. had occupied in the 1940s and 1950s. The OIA was now in the position to respond to new opportunities in both Eastern Europe and around the globe.

A symbol for how the SEC sought to aid former communist countries in creating U.S.-style securities markets is that Chairman Breeden, Mann and other SEC Commissioners and staff members traveled to Hungary to celebrate the opening of its stock exchange. They presented Hungarian officials with a replica of the New York Stock Exchange bell to ring upon its opening.(103)

Mann understood a U.S.-type securities market with U.S.-type regulation as directly related to democratization. "Banking is less democratizing, because bankers decide whether they are going to make a loan. In securities markets, you make an offering of your securities and people decide if they want to buy it or not. They can choose based on the information that they get."(104) But privatization also presented opportunities for U.S. dominance.

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Related Museum Resources


June 22, 1990
image pdf (Government Records)


June 1990
(Courtesy of Michael Mann )
June 21, 1990
Richard Ketchum, J. Carter Beese, William Hyman, Richard C. Breeden, Linda Quinn, Michael Mann, James Doty and Gary Fendler
(Courtesy of Michael Mann )
June 21, 1990
Gary Fendler, J. Carter Beese, William Hyman, Richard C. Breeden, Richard Ketchum, Michael Mann, James Doty and Linda Quinn
(Courtesy of Michael Mann )

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