The financial banks dropped a lot due to the below news
The Obama Administration is currently discussing the creation of a regulatory authority with broad powers to regulate financial products (such as mortgages and other consumer-oriented financial products) as part of the government's broader overhaul of financial regulation, as per reports in several newspapers this morning.
The discussions are reported to be in an advanced stage, and the plan is expected to be unveiled in the next couple of weeks. It is unclear if the administration will propose creating a new federal agency or place new powers within an existing agency.
Under the current complex and uneven regulatory system, the responsibility of oversight of financial products is shared by a number of state and federal agencies, including the Federal Reserve, the Securities and Exchange Commission, the Federal Trade Commission and others. Further, there are many gaps in oversight and some financial products are not regulated at all.
Broad overhaul of financial markets regulation is one of the top priorities of the Obama Administration. The comprehensive framework for regulatory reforms proposed by the Treasury Secretary Geithner in March had four broad components, one of which was "Protecting Consumers and Investors."
Other proposals included establishment of a systemic risk regulator, with authority to seize and restructure impaired firms like AIG (AIG) before they threaten the broader system, and fostering International coordination so as to ensure international rules for financial regulation are consistent with the standards being implemented in the United States.
Such coordination is critical to properly oversee the risks of financial behemoths like Bank of America (BAC), JP Morgan Chase (JPM) and Citigroup (C), which have operations all over the world. |