Who keeps watch: The money police

When you entrust your money to a bank, a broker or a fund, someone is watching. But who, exactly?

There are several watchdogs. Each has its own field, and it is best to know which one to call.

Let's start with the oldest and most famous: the SEC, in the United States.

It was born in nineteen thirty-four, five years after the crash of nineteen twenty-nine.

Before, what share buyers were told was barely regulated. From then on, a listed company had to publish its accounts and its risks.

Its basic idea has not changed: you are not guaranteed to win. You are guaranteed to be informed.

In France, it is the AMF, the Financial Markets Authority, created in two thousand three.

Its field: markets and savings products. It checks what companies publish, and what is sold to savers.

It can investigate and sanction. And it publishes blacklists of sites offering investments without authorisation.

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Its neighbour is the ACPR, attached to the Banque de France. Its field: banks and insurers.

It checks they are strong enough to keep their promises. Your deposit, your insurance policy.

And since two thousand fourteen, the largest banks in the euro area have been supervised directly by the European Central Bank.

Above the national watchdogs is ESMA, the European markets authority, based in Paris.

It supervises almost nobody directly. It makes sure the rules are applied the same way all across Europe.

To sum up: the AMF for markets, the ACPR for banks and insurers, ESMA to coordinate.

What use is this to you? One very concrete thing: checking that an intermediary has the right to sell you something.

The registers are public and free. A name missing from the registers is an alarm bell.

But beware of the twist. A watchdog does not see everything.

In two thousand eight, Bernard Madoff confessed to the largest known pyramid scheme. It had been going on for years.

Yet the SEC had received precise warnings, several times. It had investigated, and found nothing.

A regulator often arrives after the fact. It has limited means, against players who are always a step ahead.

And above all, no watchdog protects you from a bad decision, or from a stock market fall.

Oversight is a net. Not a parachute. The first check is always the one you do yourself.