
The Bush administration will be publicly announcing its regulatory overhaul on Monday, in what is being interpreted as a pre-emptive strike against more sweeping reforms under discussion in Congress. The Associated Press reports that the Federal Reserve board will become a financial FEMA :
“A plan set for release Monday would give new powers to the Federal Reserve so that the central bank serves as the system’s overarching protector of stability.
The proposal would abolish agencies such as the Office of Thrift Supervision and the Commodity Futures Trading Commission, shifting their responsibilities to other federal institutions.
When Treasury Secretary Henry Paulson outlines the ideas in a speech, the changes will represent the most sweeping overhaul of financial regulation since the Great Depression of the 1930s.”
Meanwhile, securities traders are trusting one of their own to make sure that the oversight doesn’t go overboard :
“Many on Wall Street have viewed increased government regulation of investment houses, including an expanded role for the Fed as a regulator, as a tricky balancing act. The fear among analysts is that too much regulation could hamper the companies’ ability to drive profits, and in turn shift an increasing amount of business to financial centers overseas.
But the trade group representing the securities industry did react positively to news of the administration’s plan, which is expected to be detailed Monday in a speech by Treasury Secretary Henry Paulson, a former Goldman Sachs Group Inc. chief executive.”
Associated Press : Administration Pushes Regulatory Changes
Associated Press : Washington, Wall St. Tangle on Oversight