At the end of last month I raised the question of why it had taken the Securities and Exchange Commission so long to tackle the subprime issue. It was at the time that the FBI announced it was conducting criminal investigations into how subprime loans were made and packaged, and how securities backed by them were valued. The FBI was working together with the SEC. But as I said at the time, the FBI had been looking at mortgage fraud for years. So why had the SEC been asleep at the wheel?

It's a question examined by Liz Moyer at Forbes. As she points out, the regulators have always had the power to stop the banks from selling derivatives and complex securities. Why didn't they act before? They had been reluctant to hesitant to clamp down on this market. Made up of lawyers and accountants, the SEC also lacked the ability for rigorous analysis. Which would mean the regulators had little scope to pick up the risk, and even if they did, they refused to act.

But maybe the problem is even more complicated than that. As Bloomberg's Jonathan Weil says, the SEC's mission seems to be about protecting the banking industry, not investors. As a result, Weil says, it has brought in accounting changes that allow them to keep troublesome subprime mortgages off their balance sheets.

The problem is not helped by the Bush administration increasing the SEC's budget by less than 1 percent for fiscal 2009. This Government just isn't serious about tackling the problem. But then based on past form, neither is its agency the SEC.