Talk of gatekeepers seems to be inevitable when the topic of the financial crisis arises.  Since the beginning of the crisis , this talk has primarily focused on credit rating agencies as gatekeepers. Much like other gatekeepers, such as underwriters or accountants, credit rating agencies are privy to information not generally available to the public.

A recent article from the Atlanta Fed posited that financial institutions themselves are gatekeepers, arguing that for these institutions are well-positioned to know their customers (KYC). This allows them to protect their customers from fraudulent business practices.

However, with seemingly endless additional complexities evolving in the financial sector, this is not an easy task. there is an increasing use of third parties as intermediaries for risk management and compliance functions.

The regulatory case is not as simple as having financial institutions as gatekeepers. It overlooks the classic question – Quis custodiet ipsos custodes? Who will guard the guardians? While industry involvement is important to well-rounded regulation, this question came up countless times when considering credit rating agencies as guardians and it still applies when looking at financial institutions at a broader level.