Agreement Is Near on New Overseer of Banking Risks

[ProSense]

Agreement Is Near on New Overseer of Banking Risks

By SEWELL CHAN
Published: February 17, 2010

WASHINGTON — The Senate and the Obama administration are nearing agreement on forming a council of regulators, led by the Treasury secretary, to identify systemic risk to the nation’s financial system, officials said Wednesday.

The issue is one of the most fundamental in the contentious effort to overhaul regulation after the financial crisis, and addresses one of the primary lessons of the near debacle: that no one had been assigned to ensure the stability of the system as a whole and detect the kinds of excessive risk-taking and imbalances that could rock an entire economy.

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The effect would be to diminish the authority of the Federal Reserve, whose regulation of banks has been criticized for failing to head off the problems.

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Legislation passed by the House in December to reshape the regulatory system gave the Fed more input on systemic risk than the Senate concept would.

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[hedgehog]

1. Umm, I think you want us to recommend the post? I think anything

that takes the Fed down a notch or twenty is well worth while.

[mcnealystephanie]

2. Banking Risks

As is generally the case is Washington...a grand new organizational scheme is being considered, rather than making existing regulatory regime work better. Everyone can agree that people running America's larger financial organizations can't be trusted, hence the need to close regulatory gaps and "undo" some of the freebees Congress threw in over the years.
We can achieve adequate regulation under the current regulatory regime with a few well advised changes. First, eliminate firms trading for their own account. Our recent history has shown that wall street firms will chose their interest over their customer's every time. Second, all investments, including derivatives, ought to have capital requirements as is the case for most other investments on the balance sheet. Every investment on the balance sheet ought to be accounted for with the firm's own capital. Third, reduce FDIC insurance to $50,000 per account. This will help diversify the industry by making it more difficult to grow using subsidized funds.
Stephanie Mcnealy
Famous Philanthropist Customer Service Team

[asdjrocky]

3. There will be no financial reform.

The WTO will not allow it.

[asdjrocky]

4. There will be no financial reform.

The WTO will not allow it.