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Push Is on for Regulatory Overhaul
"The crisis has clearly accelerated things," says Rep. Barney Frank, head of the House Financial Services Committee.
(Chip Somodevilla - Getty Images)
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The Federal Reserve, meanwhile, would act as a "supercop" with broad powers to oversee nearly any part of the financial markets that it sees fit.
Some analysts and lawmakers have accused Treasury of trying to implement its vision of regulation on an ad hoc basis. For instance, the Fed is serving much of the "supercop" role that was defined in the blueprint with the encouragement of Treasury officials. They denied they were trying to implement the blueprint without Congressional authority.
At the time the blueprint was announced, some lawmakers, analysts and even regulators judged the plan too idealistic. John M. Reich, director of the Office of Thrift Supervision, appeared to dismiss the plan altogether. He told his employees in an e-mail that was obtained by The Washington Post: "When the Treasury Department issues its recommendations, expect to see news stories and renewed questions about what the future will hold. Take note of the fanfare, then look back to [past failed efforts to restructure financial regulation] and resume the important work that you continue to do so well."
OTS has been responsible for regulating thrifts, including the failed firms, Washington Mutual and IndyMac, and the troubled bank, Countrywide, which was bought by Bank of America.
Yesterday, while acknowledging a coming debate over regulatory structure, OTS Chief Operating Officer Scott Polakoff warned oversimplifying the regulatory structure. "Sometimes there is the risk of improving efficiency of a system but hindering effectiveness," he said.
Staff writer Binyamin Appelbaum contributed to this report.
