Dan Janison Melville. N.Y. Tuesday January 26, 2010. Daniel Janison,

Dan Janison has been a columnist at Newsday since 2007.

Benjamin Lawsky stood Tuesday before the Long Island Association as the state's newly confirmed, newly empowered top financial regulator. Assigned the tricky mission of helping industries -- while monitoring them -- and cutting administrative costs, Lawsky cited the "very powerful . . . countervailing forces banging away at regulators in general."

One day earlier, a key example of this made national news. U.S. District Judge Jed Rakoff raked the U.S. Securities and Exchange Commission over the coals , rejecting a proposed $285 million settlement with Citigroup. The deal involved notorious toxic mortgage-securities sales. In part, Rakoff chafed at the lack of any admission of guilt by the bank.

LIA President Kevin Law asked his guest Lawsky -- a former federal prosecutor who was a high-ranking aide in Gov. Andrew M. Cuomo's former attorney general office -- to discuss his view of Rakoff's ruling. Law noted that the state's recent deals with firms to reform their mortgage service practices also didn't force admissions of guilt.

Noting "every case is different," Lawsky said the state mortgage cases specifically addressed an industrywide lack of loan-servicing capacity.

He acknowledged Rakoff's position that the settlement without description of a transgression "won't cut it." But on the "flip side," Lawsky added, such a stance could curb banks from agreeing to settle. "That ends up being the yin and yang of it," he said. For the banks, admissions of wrongdoing can expose them to costly investor lawsuits. As a result, the argument goes, these institutions could instead push their out-funded regulators into extended, expensive court cases.

Lawsky, 41, last month became the first state official to head the Department of Financial Services. His agency combines the former domains of the insurance and banking commissioners. That's especially significant in a state where those industries and their regulation were already a pretty big deal.

The Cuomo administration initially moved to include the Consumer Protection Board as well, but that agency ended up instead in the Department of State.

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Lawsky evokes a balance between the conflicting pressures of holding bad actors accountable and avoiding an obstructive role.

"I've spent a lot of time thinking about how you find a third way to regulate -- to be effective, to give consumers confidence, while at the same time not destabilizing things further. How do we thread the needle? That's a challenge Governor Cuomo has given me," he said. "That is my goal."

Giving business entities swift and clear answers to regulatory questions, coordinating with other regulators and considering the long-term consequences of New York's financial rules will help, he suggested.

Lawsky says he must do so at less expense, and that the combined agency saved 10 percent from its budget this year.

So in terms of public image, Lawsky and Cuomo are looking to come off as both aggressive and cooperative in the right ways. Or, put differently, there are two negative caricatures that they seem bent on avoiding at this superagency's outset: cronies of businesses who'd soft-pedal consumer enforcement and impassive bureaucrats.

It will be worth a look in a year or two to see if they've succeeded.