{"id":405441,"date":"2010-03-08T21:30:26","date_gmt":"2010-03-09T02:30:26","guid":{"rendered":"http:\/\/firedoglake.com\/?p=71683"},"modified":"2010-03-08T21:30:26","modified_gmt":"2010-03-09T02:30:26","slug":"dodd%e2%80%99s-finreg-draft-keeps-federal-reserve-as-main-regulator-for-big-banks","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/405441","title":{"rendered":"Dodd\u2019s FinReg Draft Keeps Federal Reserve as Main Regulator for Big Banks"},"content":{"rendered":"
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(photo: Americans4FinancialReform via Flickr)<\/p>\n<\/div>\n

Financial regulatory “reform” is beginning to look a lot like the status quo. We’ve already heard that the proposed Consumer Financial Protection Agency would be housed inside the Federal Reserve, which already held responsibility over consumer protection (and failed miserably at the task). Now the Financial Times reports<\/a> that the Fed will also keep their supervision over the biggest banks, another area in which they failed but will face no diminution of power.<\/p>\n

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Chris Dodd … is set to propose this week that the 23 largest institutions stay under the Fed\u2019s oversight … At issue … was the regulation of several hundred state chartered institutions that also want to remain under the Fed\u2019s supervision.
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\n\u201cThe Fed feels it is gaining some momentum,\u201d said [an unidentified Senate aide].<\/p>\n<\/div>\n<\/blockquote>\n

As Yves Smith says<\/a>, the Fed simply is not a functioning agency to check industry abuses. Heck, the largest banks pick their preferred officials for the top positions as the regional bank Presidents. “Keeping them in charge of bank regulation is like reappointing a fire commissioner who let half the town burn down,” she concludes.<\/p>\n

The difference between countries who failed during the financial crisis and countries who kept their footing, when it comes down to it, is the presence of a strong regulatory framework<\/a>, and also strong regulators who were not captured by the industries they were supposed to be regulating.<\/p>\n

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So what can we learn from the way Ireland had a U.S.-type financial crisis with very different institutions? Mainly, that we have to focus as much on the regulators as on the regulations. By all means, let\u2019s limit both leverage and the use of securitization \u2014 which were part of what Canada did right. But such measures won\u2019t matter unless they\u2019re enforced by people who see it as their duty to say no to powerful bankers.<\/p>\n

That\u2019s why we need an independent agency protecting financial consumers \u2014 again, something Canada did right \u2014 rather than leaving the job to agencies that have other priorities. And beyond that, we need a sea change in attitudes, a recognition that letting bankers do what they want is a recipe for disaster. If that doesn\u2019t happen, we will have failed to learn from recent history \u2014 and we\u2019ll be doomed to repeat it.<\/p>\n<\/div>\n<\/blockquote>\n

Well, the unfolding nightmare of the Dodd draft indicates that we’ve failed to learn. His quest for bipartisanship<\/a> rather than putting up a bill on which Republicans would have to make a choice, and then running on the outcome has led to a financial “reform” little changed from the structure that oversaw a massive collapse.<\/p>\n

Tags: banking industry<\/a>, CFPA<\/a>, Chris Dodd<\/a>, Federal Reserve Bank<\/a>, financial industry<\/a>, financial reform<\/a><\/p>\n

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(photo: Americans4FinancialReform via Flickr) Financial regulatory “reform” is beginning to look a lot like the status quo. We’ve already heard that the proposed Consumer Financial Protection Agency would be housed inside the Federal Reserve, which already held responsibility over consumer protection (and failed miserably at the task). Now the Financial Times reports that the Fed […]<\/p>\n","protected":false},"author":4406,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-405441","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/405441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4406"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=405441"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/405441\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=405441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=405441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=405441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}