The Administration just finished briefing reporters on the Obama Regulatory Reform plan.
Here are a few highlights of the plan:
- Create a financial services oversight council. Sounds like the current President's Working Group on Financial Markets, but the Federal Reserve is the "consolidated supervisor" of really big firms.
- Higher capital requirements are on the way. Banks and other institutions will need to have more money against the risks they take on.
- Executive compensation standards and the incentives to threaten safety and standards will get a high profile.
- Strong system of consumer protections needed for products like mortgages.
- Government will have more tools to manage a financial crisis -- some kind of mechanism to unwind firms that pose big risks to the financial system.
Well, those are the details as quick as I can serve them up. Look for more analysis to come.
Comments
The idea of giving the Fed more power is crazy. Can we forget the very reason for all the housing speculation was the easy money policies of the Fed chairman Alan Greenspan. All he needed to do to stop the housing speculation of 2003-2006 was to raise the fed funds rate from 1% to 3-5%, but no he kept rates low for 4 years and speculatoion was rampanant. Maybe require 10% down would help too. Give helicopter Ben more power are we crazy?