Wednesday, June 17, 2009

Geithner Reveals Regulation Revamp Plan

U.S. Treasury secretary Tim Geithner and Larry Summers, the director of the national economic council, have promised to unveil a comprehensive plan to “modernize financial regulation and supervision” within days.

Writing in yesterday’s Washington Post, Geithner and Summers said that after months of discussions with “Congress, regulators, business and consumer groups, academics and experts,” the Obama administration will announce its plan to “create a more stable regulatory regime that is flexible and effective; that is able to secure the benefits of financial innovation while guarding the system against its own excess.”

While Geithner and Summers made no announcement of the specific details of the plan, the U.S. Treasury secretary and the director of the national economic council said “harmonizing the regulation” of futures and securities, more robust safeguards of payment and settlement systems and strong oversight of over-the-counter derivatives market would be at the heart of the plan.

Obama's regulatory overhaul targets every corner of U.S. markets

Federal oversight would extend to every part of the U.S. financial system, ranging from sales of consumer loans to trades of complex derivatives, under a series of regulatory reform proposals set to be unveiled Wednesday by the Obama administration. The administration decided to revamp the system from within the shell of existing agencies rather than starting over fresh. The proposals call for the creation of a consumer-protection agency and a federal insurance office.

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