Senate bank chair calls for creation of super-regulator
THECHAIRMAN of the US senate banking committee has dealt a blow to President Barack Obama’s blueprint for financial reform by calling for the country’s four banking watchdogs to be merged into a single “super-regulator”.
Senator Christopher Dodd told a US newspaper that he would introduce legislation that would form the basis of the Senate’s efforts to restructure the financial landscape.
“We… need to put in place an architecture that restores confidence and makes people feel that when they engage in financial activities… that they can have confidence in the system,” he said.
“On the other side of this, I don’t want to strangle business.”
Dodd’s plans differ significantly from those of President Obama, whose administration pondered, but later rejected, a merger of the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision and the Comptroller of Currency.
Instead, the US administration wants to see the Federal Reserve transformed into a system-wide regulator, a solution that the government believes will avoid strenuous opposition from banking lobby groups putting pressure on Congress.
Dodd has said that last year’s banking crisis was due in part to the fact that institutions were able to pick and choose which regulator would oversee them, creating a situation where agencies relaxed regulation to encourage banks to choose them.