"What he's done is raise a lot of financial regulatory issues for a new Congress and new administration to vet next year.".......put in every day terms, election year "pie in the sky"!
The most radical overhaul of the nation's financial regulatory system since the Great Depression. That's how many Wall Street observers are describing the ambitious package of reforms contained in the vast 218-page plan proposed Monday by Treasury Secretary Henry Paulson.
Much of Paulson's complicated blueprint is so technical that only Wall Street mavens and regulatory bureaucrats can understand it. It will be studied for weeks and months to come.
But the most essential elements of Paulson's plan calls for providing the Federal Reserve Board with expansive new authority to deal with potentially troubled banks and brokerage firms.
The Fed, in addition to its current authority of controlling the nation's short term interest rates and money supply, would also become one of three "super-regulators" that would replace a bevy of overlapping public agencies.
Consolidation, when it is done right, can improve efficiency by getting rid of unneeded bloated and confusing-to-the-public bureaucracies. This is why the treasury chief also urges merging the Securities and Exchange Commission with the Commodities Futures Trading Commission -- a proposal that impresses many regulatory critics.
"The SEC, particularly with the advent of the Sarbanes-Oxley accounting mandates, investigates far too much minutiae that don't pose a systemic risk (to the financial system," says Competitive Enterprise Institute financial expert John Berlau. "Getting rid of this excess and redundancies ... would benefit entrepreneurs and investors."
The Institute, however, is a good deal less than enthusiastic about expanding the Federal Reserve Board's powers. "To propose, as the blueprint does, that the Fed can examine any business that poses a threat to the financial system would result in an unacceptably broad jurisdiction," says Berlau. "Many small entrepreneurs may suddenly find themselves at the Fed's mercy. Federal statutes and rules have already stretched the definition of 'financial institution' to include such diverse businesses as jewelry stores, car dealers, and travel agents."
Paulson says his blueprint is long term, and admits it does nothing about the immediate subprime mortgage mess that is slowing the economy and roiling the equity markets because, he says, the Fed's recent timely actions and Congress' stimulus package already are dealing with that.
One reform he believes could become a reality before the Bush administration leaves office is his proposed Mortgage Origination Commission. The new commission would have no real power of its own, but it would establish minimum standards for mortgage brokers and state regulatory agencies to follow voluntarily, Paulson said, and shine the public spotlight on them when they fall short.
"It's a simple idea," he told Forbes.com. The commission could discourage "real bad mortgage origination practices coming out of a lot of state regulated entities."
That would certainly be an improvement on the status quo.
Overall, Paulson's proposals are packed with new ideas, some good and some not so good, but don't expect them to be sorted out this year. What he's done is raise a lot of financial regulatory issues for a new Congress and new administration to vet next year.
Comments
"What he's done is raise a lot of financial regulatory issues for a new Congress and new administration to vet next year.".......put in every day terms, election year "pie in the sky"!
We are bailing out failing banks but those who made bad decisions on their mortgages in hopes to reduce the ones they had are out on the streets. How come the banks get better treatment than the public???
Bring the jobs back into this country, take the ones who will not work off the government payrolls, bring back the CCC camps and let them work their and to those who will not work let them be put in concentration camps in the middle of the deserts until they feel up to working for a living....The monies for all other programs that are currently being drained unto death will all of a sudden get a new lease on life....:-)
What will happen when the far-right can no longer blame their ills on the poor? I am sure Jesus is very proud of those remarks Christian134. Perhaps if we kill and torture a few poor people like the Nazis did, it would make the country feel so much better. With all the far-right moves to taking personal freedoms away this would seem consistent with their message of doom and roadmap for the country. The far-right should be ashamed of their message of hate.
Shame on you shivas. Ignorance begets ignorance.
That is ignorant isn't it Patti. Everyone knows it is liberal environmentalist who cry the earth is dying. The Christians will live forever in the New Heaven-New Earth. What freedom has the far-right taken???I know the far-lefts want to take my money and stick it up a horses rear. Of course the present administration still stuck my money up a horses rear so I can only figure we need horses rears filled with money-must be some greeen thang. I thought the far-left and far-right were both hate mongers just for different reasons????? It is nice to know the good Rev Wright doesn't have a monopoly on hate-we would have some congressional panel breaking it up. Hee,hee. Well I read the good, the bad, but where is the ugly.
I think the Sherman Anti-Trust Act prevents one side hogging all of the hate. This editorial hits it on the head, some good, some bad. I hate this kind of balance.
Personal responsibility. Such a hard thing for libs to understand.
the unconstitutional federal reserve creates crisis then grabs more power and more of your liberty. same with all of the terror
b.s.. patriot act is nothing more than a power grab. a by pass of the bill of rights. why is the fed bailing out banks? the fed is owned by those very banks. sweet deal...............
LaTwon, would you have preferred Bear Stearns declared the company bankrupt?
The Chronicle staff dropped the ball on this issue. It boils down to one key issue. Are we handing the US economy over to the federal government lock, stock and barrel? You can effectively argue we already have based on existing regulation. However, this proposal moves the federal government even more into the daily operation of businesses. Don't we have enough failing businesses as it is?!
The feds have controlled our economy for probably at least the last 30 years. Why stop them now.
The truth is the far-right spouts hypocrisy in every aspect of the judgemental philosophy towards the poor and big government. When government moves to suppress freedoms under a republican administration, the far-right develops a mantra of rationalization. It's so interesting to hear the far-right support more govt. intervention in our everyday lives, and then call the Democrats liberals.
Christian134; I haven't felt like posting lately, but your comment at 6:19 made me laugh! I agree march them all into the desert! Some folks are a drain on society!
The government sets a bad example. They spend more money than they have. I use credit cards, but not often and I try to keep them paid off. Now granted some things come up, such as hospital bills, etc that may cause debt which cannot be paid off right away, but many of the houses people bought and now cannot pay for were out of their means. They bought them out of want, not need.
bear sterns destroyed many a company by short selling their stocks into the dirt. bear sterns was as corrupt as the day was long. yes let it go under............ consequences make people behave. put the directors in jail and let the company fail.......
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