US plans finance system overhaul
Proposals would charge the Federal Reserve with protecting the system’s stability.
Agencies such as the Office of Thrift Supervision and the Commodity Futures Trading Commission, would be abolished and their responsibilities shifted to federal institutions.
Regulatory bodies
Under the current system, institutions that take deposits and are federally insured face multiple regulatory bodies.
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However, hedge funds, private equity firms and investment banks are subject to substantially less regulation.
The credit crisis that has rocked Wall Street and made it hard for ordinary Americans to obtain credit has highlighted the discrepancy in regulation efforts.
Sweeping overhaul
The proposed changes would represent the most sweeping overhaul of the country’s financial regulation since the Great Depression of the 1930s.
Christopher Dodd, chairman of the Senate banking, housing and urban affairs committee said in a statement that the recommendations deserved careful consideration.
But the Democrat senator said that he believed they “would do little if anything to alleviate the current crisis”.
The US treasury began work on the review in early 2007 and in interviews over the weekend, officials sought to frame the proposals as an effort to devise a system that would help keep US companies competitive in an increasingly connected global economy.
“These are very complex issues that require a serious amount of debate.”