The Obama administration finally made public details of its proposed financial regulation overhaul plan. It might not call for the single "super regulator" that the industry has been talking about for months, but it does seek to consolidate and augment the powers of current regulatory agencies, especially the Federal Reserve. It sounds like the goal will be to ensure there is just enough overlap between agencies to avoid any gaps in supervision that could possibly lead us to another economic crisis. If the administration gets its way, a new consumer watchdog agency would be established and the Fed would have more sweeping powers of control over the largest financial institutions.It would also give the federal government the power to unwind and break up systematically important companies, similar to what the FDIC does with banks. A report in The Wall Street Journal provides some additional perspective, posing that the idea of giving the Fed more oversight over the financial system may be distasteful to many on Capitol Hill.
I don't know if what the President et al are recommending will go over smoothly with Congress. I'm sure there will be some heated debate (along with a little bit of putting Tim Geithner over the flames). Is the single regulator idea a good one? Is a single regulatory body even capable of overseeing our 8,000 plus banks-not to mention the slew of brokerages in this country? Maybe we're just not ready for such a move in the U.S.-too many fiefdoms. Maybe the "super regulator" concept will need to start on the global stage first as each country seeks greater coordination with one another to prevent another financial disaster from occurring.