1. Welcome! Please take a few seconds to create your free account to post threads, make some friends, remove a few ads while surfing and much more. ClutchFans has been bringing fans together to talk Houston Sports since 1996. Join us!

  2. ROCKETS GAMEDAY
    The Rockets are back! Houston hits the road when they take on Zion, Ingram, Valanciunas and the Pelicans in New Orleans tonight. Join Clutch at 6:45pm CT for pregame as we watch the game live!

    LIVE! Rockets vs. Pelicans

[CNBC]White House proposes financial overhaul plan

Discussion in 'BBS Hangout: Debate & Discussion' started by SWTsig, Mar 31, 2008.

  1. SWTsig

    SWTsig Contributing Member

    Joined:
    Dec 20, 2002
    Messages:
    13,927
    Likes Received:
    3,514
    thoughts? isn't this a rather liberal approach to addressing our financial mire? significantly expanding federal powers into our markets kinda slaps conservative "free market" ideals in the face, imo. but if the fed is gonna act as a lender to secondary financial institutions, it HAS to have access to those books.

    ---------------------------------------------

    http://www.cnbc.com/id/2387578


    The Bush administration is proposing the biggest overhaul of financial regulation since the Great Depression. The sweeping plan is already drawing intense criticism -- a debate unlikely to be settled until a new president takes office.

    The 200-page document, which was to be released Monday by Treasury Secretary Henry Paulson, proposes giving broad new powers to the Federal Reserve to combat the type of severe credit crisis currently gripping financial markets.

    It would designate the Fed as a "market stability regulator" and give it the power to examine the books of any financial institution, not just banks, that might pose a threat to the stability of the financial system.

    According to a 22-page executive summary obtained by The Associated Press, the plan would also eliminate the Office of Thrift Supervision and the Commodity Futures Trading Commission, merging their functions into other agencies.

    The Paulson plan, which the administration has been working on for a year, calls for the eventual creation of three regulatory agencies.

    In addition to the Fed as a "market stability regulator," the plan would create a "prudential financial regulator" for the nation's banks, thrifts and credit unions, in place of the five agencies that perform that task now.

    The third new agency would regulate business conduct and consumer protection, taking over many of the functions of the Securities and Exchange Commission.

    The proposed overhaul would be the most extensive since the current regulatory system was created in response to the 1929 stock market crash and the Great Depression.

    It comes at a time when the financial system faces its most severe credit crisis in two decades, one that has resulted in billions of dollars of losses for big banks and investment houses and the near-collapse of the country's fifth-largest investment bank.

    The rising tide of bad debt has made it harder for consumers and businesses to get credit, further weighing on an economy struggling with a prolonged housing slump and soaring energy prices. Many economists believe the country is already in a recession.

    The market turmoil has presented an opening for critics to make the case for stronger federal rules to prevent abuses. Treasury Secretary Paulson rejects making that link.

    "I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil," Paulson said in a draft of remarks he was to deliver Monday.

    Democrats said the plan wouldn't do enough to crack down on problems in mortgage lending and the sale of complex financial products that have been exposed by the current market turmoil.

    Senate Banking Committee Chairman Christopher Dodd said that the administration blueprint "would do little if anything to alleviate the current crisis."

    House Financial Services Committee Chairman Barney Frank, D-Mass., who is working on his own regulatory revamp, called Paulson's plan a "constructive step forward" but said it wouldn't give the Federal Reserve the regulatory authority needed for its broader market stability role.

    Frank and others said that given the complexity of the issues, they expect the debate on the Paulson proposal and Democratic alternatives will continue in Congress as the next president takes office.

    Business groups are split on the Paulson approach. The U.S. Chamber of Commerce and the securities industry support the broad outlines, but banking lobbyists are critical of some of the details affecting their industry.

    "Dismantling the thrift charter and crippling state banking charters will weaken banking in America," said Edward Yingling, president of the American Bankers Association.
     
  2. glynch

    glynch Contributing Member

    Joined:
    Dec 1, 2000
    Messages:
    17,725
    Likes Received:
    3,367
     
  3. rodrick_98

    rodrick_98 Contributing Member

    Joined:
    Oct 26, 2000
    Messages:
    4,362
    Likes Received:
    6
    add this to the list of many tried and failed (either to implement or failure once in practice) policies of this administration. horrible idea.
     
  4. michecon

    michecon Contributing Member

    Joined:
    May 19, 2002
    Messages:
    4,983
    Likes Received:
    9
    Pretty soon Fed would have to oversee non-financial company also, since some of the financial products will migrate to non-financial firms after the added regulation. Just like how new financial products were created to avoid the old regulation.
     
  5. JeopardE

    JeopardE Contributing Member

    Joined:
    Jun 29, 2006
    Messages:
    7,418
    Likes Received:
    246
    I can't believe I'm saying this, but I completely agree with you here, glynch. The current mess was created because untethered capitalism got out of hand, and that's the harsh reality of the situation. Libertarians will always hate it when regulation is proposed, but even level-headed conservatives have to concede that with changing times and changing markets, sometimes the government has to make significant moves to catch up.
     
  6. rimrocker

    rimrocker Contributing Member

    Joined:
    Dec 22, 1999
    Messages:
    22,203
    Likes Received:
    7,898
  7. SWTsig

    SWTsig Contributing Member

    Joined:
    Dec 20, 2002
    Messages:
    13,927
    Likes Received:
    3,514
    i would love to hear texxx_j's thoughts on this issue.
     
  8. Invisible Fan

    Invisible Fan Contributing Member

    Joined:
    Dec 5, 2001
    Messages:
    42,891
    Likes Received:
    24,893
    The moment these guys became Too Big To Fail, moral hazard became a package deal.

    I'm not sure how regulating will benefit the economy or prevent systemic earth-shattering corruption, but if they can be bailed out by the government, I do want something in return for my money they're playing with.

    As long as my money's worth something...
     
  9. Rocket River

    Rocket River Member

    Joined:
    Oct 5, 1999
    Messages:
    60,896
    Likes Received:
    28,399
    I figure they will ask you for your degree in Economics
    then
    tell you how you are unqualified to comment
    then
    they will SCOFF and Boister about how unbeleivably dumb/stupid/crazy your ideas/thoughts/comments or anyone else's ideals are

    no . .wait .. i am wrong. . they will Scoff 1st

    Rocket River
     

Share This Page