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发表于 2009-6-17 12:19 PM
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Obama Lays Out ‘Sweeping Overhaul’ of Financial Rules (Update1)
June 17 (Bloomberg) -- President Barack Obama said his plan to refashion supervision of the U.S. financial system is needed to fix lapses in oversight and excessive risk taking that helped push the economy into a prolonged recession.
The proposal, much of which will be subject to approval by Congress, sets out the biggest overhaul of market rules in more than seven decades, adding an additional layer of regulation for the biggest firms. It would create an agency for monitoring consumer financial products, make the Federal Reserve the overseer of companies deemed too big to fail, and bring hedge and private equity funds under federal scrutiny.
“This was a failure of the entire system,” Obama said at a White House event that included the leaders of the Treasury, the Fed and other regulatory agencies. “An absence of oversight engendered systematic, and systemic, abuse.”
The announcement marks the beginning of what promises to be a political battle that’s likely to alter the president’s plan. Obama, who has called the “sweeping overhaul” of regulations one of his top domestic priorities, said wants to sign legislation to enact it by the end of the year.
The administration’s proposal comes after a year of shocks on Wall Street and a credit crunch that contributed to the worst U.S. recession in half a century. Since September, the government has been forced to spend billions of dollars bailing out such firms as Citigroup Inc., Bank of America Corp., American International Group Inc., General Motors Corp. and housing finance companies Fannie Mae and Freddie Mac.
OTS Eliminated
While lax government regulation helped lead to the crisis, Obama’s suggested the changes he’s proposing don’t fully reshape U.S. oversight. Aside from eliminating one banking agency, the Office of Thrift Supervision, it leaves much of the current system in place -- a nod to the difficulties of getting a law passed amid congressional and interagency turf battles.
“More can and should be done in the future,” a White Paper laying out the details of the plan said. “We focus here on what is essential: to address the causes of the current crisis, to create a more stable financial system that is fair for consumers and to help prevent and contain potential crises in the future.”
Edward Yingling, president of the American Bankers Association, said his group has some “real concerns” about the consumer protection measures.
Regulatory ‘Burden’
“For community banks that had nothing to do with this crisis, this will be massive regulation that will burden them with new costs,” Yingling said as he arrived at the White House for the announcement.
David Hirschmann, president of the U.S. Chamber of Commerce’s capital markets center, said the largest American business lobby group is disappointed with the plan.
“While the administration has made several positive recommendations, we’re concerned that overall, the proposal simply adds to the layering of the system without addressing the underlying and fundamental problems,” he said. “We can’t simply insert new regulatory agencies and hope that we’ve covered our bases.”
Democratic Representative Barney Frank of Massachusetts, chairman of the House Financial Services Committee, said, “I like what I see” of the proposal. He said lawmakers likely will make some changes, though he refused to go into specifics.
Consumer Protections
The new Consumer Financial Protection Agency would oversee products from mortgages to credit cards. It would have authority to ban “unfair terms and practices,” punish companies for violations with fines and penalties and write rules to set higher standards for banks and non-bank companies.
A re-named regulator, known as the National Bank Supervisor, would watch over federally chartered lenders. It would assume the duties of the OTS and Office of the Comptroller of the Currency.
The central bank would get responsibility to oversee all systemically risky financial firms, a move that aims to eliminate gaps in oversight that contributed to the collapse of Bear Stearns Cos. and Lehman Brothers Holdings Inc. last year. The Fed would monitor not only banks but large financial companies, such as insurers or hedge funds, whose interconnections in the financial industry mean their failure would endanger the system.
“These firms should not be able to escape oversight of their risky activities by manipulating their legal structure,” the White Paper said. Through higher capital requirements and stronger regulatory scrutiny “our proposals would compel these firms to internalize the costs they could impose on society in the event of failure.”
Fed’s Role
The Fed, while gaining a bigger role as the systemic regulator, would have some of its emergency lending power curbed. The plan calls for the Treasury secretary to approve in writing any emergency funding.
The central bank must also conduct a study of its structure under the administration’s plan. The Treasury and outside experts “should have substantial input into the review and the resulting report” on the Fed’s governance study, the paper said.
The Treasury can propose changes to the central bank’s structure “to improve its accountability and its capacity to achieve its statutory responsibilities.” |
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狗仔卡
发表于 2009-6-17 12:24 PM
