After several reports that many of the Obama administration’s more ambitious proposals to streamline the financial regulatory system were off the agenda, a number of voices have attempted to revive those discussions. Senator Charles Schumer (D-NY) yesterday expressed his wishes to the administration. The House Republicans put forth their own plan for restructuring. Even the New York Stock Exchange CEO weighed in on the proposed Securities and Exchange Commission (SEC) and the Commodity Futures Trade Commission (CFTC) merger.
According to the Washington Post, Schumer wrote a letter to Treasury Secretary Giethner yesterday encouraging him not to “make compromises before the process even starts.” Schumer would like to see a single banking regulator and a joining of the SEC and the CTFC to regulate financial markets. He astutely points out that having multiple regulators creates overlaps in oversight and allows financial institutions to pick the regulator that suits them best. POGO will post a link to the full letter as soon as one can be located.
Meanwhile, the Republicans on the House Financial Services Committee released a six page plan for financial regulatory reform. Among other things, the plan opposes giving the Fed more regulatory authority and advocates for streamlining the regulatory framework by way of combining various oversight authorities.
While POGO does not take a specific position on the restructuring itself, we agree that something needs to be done about the patchwork regulatory system that exists today. Missing from the debate to this point, however, are discussions on how to encourage whistleblowers to come forward, how to shut the revolving door between regulatory authorities and industry, and how to improve the transparency of both markets and regulators.
Despite the missing elements, POGO applauds the leaders coming forward to encourage discussion of these important changes.
- Eric Orenstein