President Wants New Financial Regulations

President Wants New Financial Regulations

Federal Reserve would gain and lose power.

President Barack Obama has proposed new regulations for the nation's financial system. These new regulations would in effect reverse the trend started by President Ronald Regan in the 1980s to cut back on federal regulation. The President says current regulations were too slow to respond to the speed, scope and sophistication of the 21st Century Global Economy.

 

Under the President's plan the Federal Reserve would gain power to supervise holding companies and large financial institutions considered so big that their failure could undermine the nation's financial system. But even as it gained new powers the Fed would lose some banking authority to the new Consumer Financial Protection Agency.

 

While commending the President for taking steps, Senate Ag Committee Chairman Tom Harkin, D-Iowa, said it is critical to enact additional reforms not covered in the outline and to make sure those reforms are vigorously carried out and enforced. Harkin also is concerned that this plan does not do enough to prevent financial institutions from becoming too big to fail in the first place.

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