Week 1/Blog 2

Today, the Senate Banking Committee announced a new bill that, if passed, would strip the Federal Reserve of its supervisory power and replace it with three separate agencies designed to “police banks, protect consumers, and dismantle failing institutions.” Over the past four years, the Fed has increased its regulatory powers, but, according to committee chairman Chris Dodd, it has failed- epically. And of course, the financial industry was quick to retort. Edward Yingling, president of the American Bankers Association, stated, “The bill would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis.” Republican opposition has not been as staunch as anticipated, but they have expressed concerns that the bill would create unnecessary bureaucracy and make credit difficult to obtain.

As this is such a new proposal, and I’m relatively unfamiliar with the functioning of the Federal Reserve, it’s difficult to be anything but skeptical. But more than anything, I’m rather surprised that this was even proposed while healthcare is still in the Senate. It wouldn’t be plausible to ignore every issue until healthcare is passed, but focusing on more Republican-friendly ones wouldn’t be a terrible idea while there’s a black tornado of death attached to Obama’s political capital. Three cheers for partisan politics and policy gridlock.

In the meantime, can we expect another Bank War? Will Obama kill the bank before it kills him? I seriously doubt it.
I'm all for strict government regulation, but seriously Senate Banking Committee, what are you thinking? Maybe sometime, hopefully sometime, but not now.

Here is the article I plagiarized:
http://news.yahoo.com/s/ap/20091110/ap_on_bi_ge/us_financial_overhaul

C-SPAN has a pretty interesting video and a summary of drafted legislation:
http://www.c-span.org/Watch/Media/2009/11/10/HP/R/25741/Sen+Dodd+releases+regulatory+reform+legislation+draft.aspx