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Every fix arrives five to sixteen years late.
The pattern is older than the SEC. A new financial technology emerges. It is used, abused, and eventually produces a crisis. The crisis passes. Then, years later — long after the losses have been socialized — a regulator appears with a response that would have been useful a decade earlier.
The South Sea Company crashed in September 1720. Parliament's response, passed that same year, was to effectively ban joint-stock companies altogether. The fraud was stopped — by crippling the legal form that made fraud possible, along with every legitimate use of that form for the next century.
Before 1862 the United States had no federal currency. State-chartered banks issued their own notes; over 7,000 different note designs circulated by the Civil War. The war forced the federal government to create a national currency for the first time, and the panics of the late 19th century forced it to create a central bank to backstop that currency. Two laws passed in 1862 and 1863, and the Federal Reserve Act of 1913, are the institutional foundation that the SEC, the FDIC, and every later regulator was built on top of.
The 1929 crash revealed that US public companies were under essentially no obligation to tell the truth. It took five years, a 90% decline in the Dow, and a new administration for Congress to create the Securities and Exchange Commission.
Black Monday's 22.6% single-day drop exposed the fragility of fully-electronic, program-driven markets. The NYSE responded within a year — an unusually fast turnaround, precisely because the 1987 crash did not turn into a recession.
The late 1990s and early 2000s saw the most dramatic loosening of financial regulation since the 1920s. Glass-Steagall was repealed. OTC derivatives were explicitly exempted from CFTC oversight. When Enron and WorldCom showed what the new environment produced, Congress responded with Sarbanes-Oxley — but only on corporate accounting, not on the structural changes that had already happened inside the banks themselves.
The risk was named in 1994. Brooksley Born, chair of the CFTC, warned that unregulated derivatives could threaten the financial system. She was overruled by Greenspan, Rubin, and Summers. In 2008 the thing she warned about happened. In 2010, two years after the crisis, Congress passed Dodd-Frank.
Bitcoin launched in January 2009. As of 2026, the United States still has no comprehensive federal framework for digital assets — only a fragmented enforcement regime spanning the SEC, CFTC, Treasury, and a dozen state regulators. Billions have been lost, refunded, or quietly written off in the meantime.
AI systems are trading trillions. Large language models are reading news feeds and adjusting positions in milliseconds. No specific federal framework governs this class of behavior. The largest regulatory gap in financial history is being created in real time — and it is on track to be the longest-lived.
Each bar is drawn on a log scale — the relative intensity of that era against the others. On a linear scale, the earliest eras would disappear into a single pixel next to the most recent ones.