Proposing Restrictons on FED

Chairman of the US Senate Banking Committee, Christopher Dodd porpose a new financial overhaul bill before the Congress. The bill includes the establishement of a financial regulatory administration that will take away the supervision authority of Federal Reserve and FDIC, and limit the FED‘s lending.

“The Federal Reserve will focus on monetary policy without being distracted by responsibilities for bank oversight and consumer protections.”

The Senate Banking Committee

(Article in Norwegian)

Formannen i senatets bankkommite har lagt frem et lovforslag som vil frata Federal Reserve og banksikringsfondet FDIC nesten all makt og myndighet, og erstatte institusjonene med et ny finansadministrasjon.

Lovforslaget fra senator Christopher Dodd innebærer opprettelsen av The Consumer Protection Agency som president Obama lanserte for kort tid siden.

I tillegg forslår The Senate Banking Committee at det opprettes en hovedmyndighet for finansnæringen; THE FINANCIAL INSTITUTIONS REGULATORY ADMINISTRATION.

Om den nye offentlige administrasjonen skriver senatets bankkomite:

• “The Financial Institutions Regulatory Administration will eliminate the alphabet soup of multiple bank regulators that has led to weak, confusing regulation where it’s easy for problems to fall through the cracks and difficult to know who is responsible.”

• “Headed by an independent chairman appointed by the President and confirmed by the Senate, a Vice Chairman experienced in state banking regulation, and a board including the chairmen of the FDIC and the Federal Reserve and two other independent members. It will be funded primarily by assessments on the industry.”

• “Combines the functions of the Office of the Comptroller of the Currency and the Office of Thrift Savings, the state bank supervisory functions of the Federal Deposit Insurance Corporation and the Federal Reserve, and the bank holding company supervision authority from the Federal Reserve.”

Tøffere enn Obama

Christopher Dodd medlemmene av bankkomiten går enda lenger i sin regulering av finanssektoren enn det president Barack Obama til nå har gjort.

Obama lanserte for noe uker siden det nye Consumer Protection Agency som skal ivareta forbrukernes interesser i næringen.

Finansforbrukerbyrået et innebakt i lovforslaget, men i tillegg foreslåes det å opprette følgende organer:

• The Agency for Financial Stability

• Office of National Insurance

• Credit Rating Agency
Sistnevnte skal legges inn under de nåværende tilsynsmyndighetene Securities ad Exchange Commission og Central Clearing and Exchange Trading som skal styrkes og gis større fullmakter.

Om byrået for finansiell stabilitet skriver bankkomiten:

• Tough to Get Too Big: Writes increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, imposing significant costs on companies that pose risks to the financial system.

• Break Up Large, Complex Companies: Gives the regulators the authority to break up large, complex companies if they pose a threat to the financial stability of the United States.

• Close Gaps in Regulation: Identifies unregulated financial companies that pose systemic risk and assigns them to a federal regulator for supervision.

• Lean and Mean: Expected to be staffed with a highly sophisticated staff of economists, accountants, lawyers, former supervisors, and other specialists. With just rule writing authority and no direct supervision, the agency can remain small but effective.

• Make Risks Transparent: Collects and analyzes data to identify and monitor emerging risks to the economy and make this information public in periodic reports and testimony to Congress twice a year.

Planlegge “begravelser”

Stabilitetsbyrået skal gjøre slutt på “too-big-to-fail”-prinsippet og sørge for at finansinstitusjoner som ikke er lønnsomme avvikles hurtig og i ordnede former.

“Creates a mechanism for the FDIC to unwind failing systemically significant financial companies through receivership, but not open assistance. Costs of unwinding these companies will ultimately be charged to financial firms with assets of over $10 billion, not to the taxpayers.”

Det nye byrået vil også få myndighet til å bestemme over Federal Reserve sine utlån til bankene.

“Limit Federal Reserve Lending: Updates the Federal Reserve’s 13(3) lender of last resort authority to allow system-wide support for healthy institutions or systemically important market utilities during a major destabilizing event, but not to prop up individual institutions.”
Når det gjelder FED og FDIC sin videre skjebne skriver bankkomiten:

“The Federal Reserve will focus on monetary policy without being distracted by responsibilities for bank oversight and consumer protections.”
“The FDIC will focus on its jobs as deposit insurer and resolver of failed institutions, retaining backup examination authority over troubled banks and gaining additional authority to accompany the new agency on examinations of healthy banks and holding companies to ensure it has sufficient information to perform its insurance functions.”
Her er en kortversjon av lovforslaget om reguleringer i finanssektoren.

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