The WSJ is out with the first rumors/speculation about the Obama financial regulatory overhaul. It’s expected on Wednesday.
According to the Journal the Fed is the big winner as it becomes the “systemic regulator” but somehow it’s going to have to do this as a member of some council of regulators. Evidently they will have input into the Fed’s decisions. Sounds like a cluster**** to me but that’s government.
There’s going to be a new consumer financial products commission or something or other to protect all of us from high credit card rates, mortgages we might want but aren’t good for us and whatever else we need to be saved from. The process for taking over any financial firm dubbed systemic (note we’re not talking just about banks here) will be clarified. I think that means the government is going to expand its powers beyond the banking sector and into a lot of nooks and crannies of the financial system.
Of course all of this is subject to the review and input of Congress which might very well be one of the grandest shows of the year. I think it’s rational to expect that whatever emerges from those halls will not in any way resemble what the administration might propose.
The Journal article suggests that all of this will be done by the end of the year. Let’s see, the Obama administration plans to reform health care, resurrect GM and Chrysler, move the country towards some sort of energy tax, remake the entire financial system regulatory apparatus and pull the country out of recession in the space of what, six more months. Not bad. I suppose on the seventh day they won’t rest but will find something else to work on.
I’m offering pretty good odds that they don’t pull off more than two of the above. Since they’re already getting their way on GM and Chrysler you pick the other one that succeeds.