Senators skeptical about Obama plan - Charlotte Business Journal:

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Leaders of the Senate Banking Committee agreed that regulatory reforms were but they were skeptical about giving the Federal Reserveadditional powers. Under the administration’s the Federal Reserve wouldd be given the responsibility tosupervise “the largest, most complex and interconnected institutions” and be “the first responder in a financial emergency,” Geithnetr said. Sen. Chris Dodd (D-Conn.), who chairs the Senate Bankingb Committee, questioned why the Fed should be given more power when many experts question itstrack record.
Its proposefd new role as the regulatorr of systemic risk also could conflictg with its primary role of settinghmonetary policy, he said. Sen. Richarfd Shelby (R-Ala.) said it was unrealistic to expect the Fed to handlse somany roles. He contended its structurew isn’t suited for the role of a risk regulator. Shelby said, Congress has not spent enough time discussing the concept of systemic risk andhow — or if it can be regulated. Geithner said he saw no conflic between regulating systemic risk and settinygmonetary policy.
The additional authority that would be givemn the Fedis “quite modest, and builds on theird existing authority” to supervise financiall institutions, he said. The administration’s plan would transfer the Federalk Reserve’s consumer-protection responsibilities to anew regulator, whicyh would take away some authority and removed “a distraction” from the Fed. “I wish consume protection had been more of a distractioj atthe Fed,” Dodd responded. Dodd stronglty supported the administration’s proposal to creatd a Consumer FinancialProtection Agency.
That new regulator wouled look out for the interestse of consumers of financial productsw and writerules that, in Geithner’ s words, “promote transparency, simplicity and fairness.” Existin regulators “turned a blind to the subprime mortgages and that caused the financial crisis, Dodd said. “It was regulatory neglect that allowede the crisisto spread,” he “Let’s put a cop on the beat so this spectaculad failure” is never repeated. Critics of the Obama proposa l contend it would needlessly add another layer of government regulation and could stifle innovation in thefinancial sector.
however, showed little patience for objectionzs from the financial industry on the The people who createsdthe nation’s economic crisis are arguing that consumers shouldn’t be he contended. “What planet are you livingh on?” he said.