Treasury backs sweeping financial change; Democrats say more needed
By Kevin G. Hall | McClatchy Newspapers
* Posted on Monday, March 31, 2008
WASHINGTON — Treasury Secretary Henry Paulson on Monday unveiled the most sweeping proposal to revamp the nation's financial regulatory system since the Great Depression. How much of it is enacted, however, will depend greatly on the political will of the next administration and the next Congress.
"These long-term ideas require thoughtful discussion and will not be resolved this month or even this year," Paulson acknowledged in a speech detailing his Blueprint for Regulatory Reform.
The proposals would broadly expand the powers of the Federal Reserve, merge the regulation of stock and commodities markets, fold savings and loan institutions under the umbrella of bank regulation and even allow insurance companies to opt out of state regulation in favor of a newly created federal insurance regulator.
For consumers, Paulson's plan would create a new super-regulator whose powers would cut across various financial services with overarching responsibility for protecting investors and consumers. The plan also would create a new federal entity to oversee the mortgage origination process so that lending standards never again would erode to the point where they sink the national housing market.
Very little of the plan can be set in motion by executive order or under existing regulatory authority, so it'll be up to the next president and Congress to determine how to proceed.
Leading Democrats who now control Congress didn't rush to embrace the Paulson plan.
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