With the push to establish the Financial Services Oversight Council, is President Barack Obama just recycling flawed regulatory measures by reshuffling the current regulatory deck and coining it with fresh “changed” names? From all indications, that is exactly what it appears; or to leverage one of the presidential campaign terms…”it’s a pig with lipstick.”
In March of 2008, President Obama made a campaign speech at the Cooper Union in which he vociferated a need for a “modern regulatory scheme.” In his speech to the black suit and red tie attendees in New York, he stated:
“Old institutions cannot adequately oversee new practices. Old rules may not fit the roads where our economy is leading.”
While most individuals would not disagree with his rather broad and all encompassing generic/comprehensive statement, his actions have in fact been in conflict with what he stated. For example, under his leadership, the Public-Private Investment Program (P-PIP) and Temporary Asset Relief Program (TARP) have been directed and managed under the same regulatory bodies. In addition, the same antiquated or obsolete regulatory apothegms he referenced in his Cooper Union speech have also been extended to non-banking organizations such as Chrysler, GM and AIG.
Whether you fall into the left, middle or right politically, each person must acknowledge Obama’s abnegation to regenerate our regulatory structure, did not come to fruition when he announced his Financial Regulatory Reform Plan. Instead of constructing a fresh regulatory approach and foundation, he simply reconfigured the same regulators, coined new titles and utilized the same rules of regulatory application he had previously disqualified as antiquated in his Cooper Union speech.
As part of the Financial Regulatory Reform Plan, Obama proposes the Treasury Department, Securities and Exchange Commission (SEC), Federal Reserve and Federal Deposit Insurance Commission (FDIC) plus four other agencies form what is labeled the Financial Services Oversight Council. The macro intent of The Council is to gather the identified regulatory agencies and have them work cooperatively to identify unsafe financial instruments and organizations systematically at risk. It is also tasked with providing direction to the Federal Reserve to help them identify Tier 1 Financial Holding Companies that Read more
