The Securities and Exchange Comission will be out of business if there is a government shutdown, agency chairman Mary Schapiro warned recently.

She also warned that efforts to reduce agency funding through various proposals by House Republicans will “mean fewer cops on the beat, even though fraudsters show no sign of backing off.”

In comments at a Dallas conference, Ms. Schapiro said that, “… tomorrow, unlike almost every other financial regulator, we may be shut down.”

Her remarks were made at the spring conference of the Society of American Business Editors and Writers, being held in Dallas.

Ms. Schapiro was commenting on the fact that the White House and Sen. Harry Reid, D-Nev., Senate majority leader, are warning that talks on a budget deal are at an impasse, and that most federal employees will be off the job as of midnight if no deal is reached.

House Republicans are proposing a budget for the remainder of the current fiscal year, which ends Sept. 30, that calls for a reduction in SEC funding.

And a 10-year budget blueprint proposed by Rep. Paul Ryan, R-Wis., would cut an additional $6.2 trillion from the federal budget and reduce the deficit by $4.4 trillion more over the next decade than would the budget proposal President Barack Obama made in February.

Part of the cuts would be achieved by cutting spending at federal agencies to levels below those of 2008. In testimony before Congress last month, Schapiro said that under such a scenario, the SEC would have to slash its budget by $241 million, eliminate about 1,000 positions and “dramatically” curtail examinations of both public companies and agents and brokers regulated by the agency.

In her comments today, Ms. Schapiro said it also “means we cannot hire the qualified experts eager to help us keep pace with the ever-evolving financial markets. It means cancelling IT initiatives that would help us analyze market data faster and financial information more cost-effectively. It means bringing cases to trial without expert witnesses or the information our digital forensics lab could have discovered on laptops or iPhones.”

Moreover, Schapiro said, “Insufficient funding for the SEC means an investor protection effort hobbled at a time when the events of the last decade have proved that effective enforcement of the securities laws is more important than ever.”

In her comments, she said that, “We are dedicated to being the most effective SEC ever.”

“We’ve acknowledged past mistakes, we have changed structure and culture, and we are winning back the respect of market participants and observers,” Ms. Schapiro said.

But, she added that the SEC cannot do its job as well as American investors need and deserve if it cannot hire the people, build the systems and make the changes necessary to protect U.S. markets and support job creation.

“There are days when I read the financial news and I feel I must have been transported back to 1928,” Shapiro said. “Far too often, the financial regulatory debate seems to ignore eight decades of financial history. We now know that a functioning and effective financial system demands an effective and committed referee. We must be that referee.”