Obama set to Unveil Financial Reforms, New Powers for Fed Reserve

June 15, 2009

(ChattahBox)—According to the Wall Street Journal, President Obama is set to release his vision for the reform and organization of the agencies that oversee and regulate financial markets and banking institutions. Set against the backdrop of the crisis of non-bank financial institutions, like AIG, the new regulations would ensure that agencies have the power to unwind failed financial companies to avert any future, system-wide financial meltdowns.

The remake of financial regulations is detailed in a government “White Paper,” which proposes increased powers for the Federal Reserve and other regulating agencies to unwind large failed institutions, and the creation of a new consumer-oriented regulator to deal with mortgages and credit cards.

The government is also seeking the power to set capital and liquidity requirements for the nation’s largest financial institutions to ensure that wide-scale systemic risk to the economy is minimized.

The White House also plans to make it harder for firms to go out regulator shopping, searching for the agency with the least restrictive regulations.

There will be a shakeup and consolidation of some financial agencies, with the closing of the Office of Thrift Supervision. Some of the proposed changes could result in turf wars, affecting the final overhaul plan when lawmakers finally vote on it.

Clashes between the Federal Reserve and the Central Bank are expected regarding new enforcement powers, setting capital and liquidity requirements for the largest financial firms.

The White Paper stops short of a merger between the two rival agencies, the Securities and Exchange Commission and the Commodity Futures Trading Commission, but calls for increased cooperation between the two agencies.

Obama’s financial regulatory reform plan is set to be announced on Wednesday, with Treasury Secretary Timothy Geithner scheduled to present the plan to Congress on Thursday.

House Financial Services Committee Chairman Barney Frank plans to present President Obama with a reform bill by the end of August.


Comments

2 Responses to “Obama set to Unveil Financial Reforms, New Powers for Fed Reserve”

  1. Credit Card Consolidation - Overhaul of financial system would exclude consolidation - St. Louis Post-Dispatch on June 16th, 2009 5:23 am

    […] Obama set to Unveil Financial Reforms, New Powers for Fed Reserve – Chattahbox.com(ChattahBox)—According to the Wall Street Journal , President Obama is set to release his vision for the reform and organization of the agencies that oversee and regulate financial markets and banking institutions. Set against the backdrop of the […]

  2. Credit Card Consolidation - 5 easy tips will help you master your student loans - Dallas Morning News « Credit Card Consolidation on June 16th, 2009 3:30 pm

    […] Obama set to Unveil Financial Reforms, New Powers for Fed Reserve – Chattahbox.com(ChattahBox)—According to the Wall Street Journal , President Obama is set to release his vision for the reform and organization of the agencies that oversee and regulate financial markets and banking institutions. Set against the backdrop of the […]

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