Obama to overhaul regulation

PRESIDENT Barack Obama will tomorrow outline the most sweeping overhaul of US financial regulation since the Great Depression, in an attempt to prevent a repeat of last year’s financial crisis.
 

Treasury secretary Timothy Geithner and White House economic adviser Lawrence Summers yesterday said the administration plans to create a “council of regulators” to coordinate supervision across the financial system. It also plans to raise capital requirements for all institutions, with more stringent requirements for the largest firms.
 

And Geithner wants more “robust reporting requirements” for issuers of asset-backed securities and a reduction in the reliance on credit rating firms.
 

He said the Federal Reserve will be given enhanced powers to supervise and seize control of large institutions through an “orderly resolution mechanism” if their failure might cause a financial panic.

Geithner added: “We want to have a more boring system, a little less exciting, a little less drama.” He said the overhaul would eliminate “gaps” in the system that had exacerbated the crisis.