The Mother of All Fiscal Reforms
Congress is trying to clean up the mess from our easy money fiasco. Grab your galoshes… some serious slop to wade through today.
Sen. Chris Dodd unveiled a whopper of a bill this week, one that might cause the biggest financial and monetary shakeup… umm… ever. Like most of Congress, we’ve barely cracked the 1,136-page affair… but here’s what we’re picking up thus far:
- Under the proposed bill, the Fed gets stripped of almost all its banking oversight and consumer protection powers. Bernanke and company will be used only to determine monetary policy.
- The bill would create three new government agencies:
- One would be designed to regulate banks, essentially combining the current powers of the Fed, the Federal Deposit Insurance Corporation, the Comptroller and the Office of Thrift Supervision
- The second new agency — the Agency for Financial Stability — would be a “council of regulators” that would monitor systemic risk, enforce capital standards, limit leverage and even break up companies if Congress sees fit
- The third agency would be called the Consumer Financial Protection Agency, which will save us from ourselves by regulating consumer mortgage, credit and investment products
- The SEC, for all its glory, gets more power and more money.
- Hedge funds with more than $100 million will have to register with the SEC and disclose more information. Investment advisors and ratings agencies will also be targets for stricter oversight.
Looks like the most complicated regulatory system in the world is about to get much more complicated. Well keep an eye on it.
The real question: Who will benefit from these proposals? Follow the money…
Shameful. How’s this for reform… the world’s biggest banks should not be allowed to buy a campaign for the chairman of the Senate Banking Committee.
The Mother of All Fiscal Reforms originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.
Original Article: Daily Reckoning
Tags: Agency of Financial Stability, bank reform, Banking, Bernanke, Biggest Banks, Chris Dodd, Chris Dodd bill, Consumer Mortgage, Daily Reckoning, Debt and Deficit, Deposit Insurance Corporation, Fed stripped of banking oversight, Federal Deposit Insurance, Federal Deposit Insurance Corporation, Fiscal Reforms, Galoshes, Information Investment, Investment Advisors, Investment Products, Monetary Policy, Mortgage Credit, Office Of Thrift Supervision, Regulatory System, SEC power increase, Senate Banking Committee, Shakeup, stricter financial oversight, Systemic Risk, Whopper