According to the Washington Post article: Treasury Wants to Reshape Regulation by David Cho on 3/29/2008:
The Treasury Department on Monday will propose a far-reaching overhaul of the nation's financial regulatory structure that would reshape the relationship between Wall Street and Washington and redefine the responsibilities of some of the federal government's most powerful agencies, according to administration officials.
The initiative calls for some long-standing government agencies to combine and others to disappear. Major players at the core of the nation's financial system, including banks, securities firms, insurance companies, commodity investors, and mortgage firms and brokers, may have to submit to increased oversight.
The New York Times says: (click here)
The Treasury Department is rushing to complete its own blueprint for overhauling what is now an alphabet soup of federal and state regulators that often compete against each other and protect their particular slices of the industry as if they were constituents.
“What we’re looking at in our blueprint is how to make our regulatory structure more efficient, less duplicative and more in line with today’s capital markets,” said David G. Nason, assistant secretary of the Treasury for financial institutions. “We’ve got five regulatory agencies focused on depository institutions. We’re one of the only countries in the world that separates securities from futures, and our regulation of insurance is solely at the state level.”
The Huffington Post says: (click here)
The Treasury Department will propose on Monday that Congress give the Federal Reserve broad authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.
The proposal is part of a sweeping blueprint to overhaul the country's hodge-podge of regulatory agencies, which many specialists say failed to recognize rampant excesses in mortgage lending until after they triggered what is now the worst financial calamity in decades.
According to MarketWatch: The proposal is divided into "short-term" and longer term proposals.
Under proposals for quick action, the Treasury suggested that a new Mortgage Origination Commission be created to develop standards for state mortgage market participants.
The body would be run by a presidential appointee and a board with representatives from the Fed, the Federal Deposit Insurance Corporation and other existing government bureaus.
In the longer term, the blueprint would merge some regulatory bodies. Under the plan, the Securities and Exchange Commission and the Commodity Futures Trading Commission would be combined into a single market-watching body.
Similarly, the Office of Thrift Supervision -- which currently oversees federal thrift banks and credit unions -- would be folded into the Office of Comptroller of the Currency to create a unified banking regulator.
Ultimately, this would leave the U.S. with three agencies instead of the fragmentary system.
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