A Heritage Foundation expert on financial deregulation is praising Treasury Secretary Henry Paulson's ambitious plan to overhaul the federal regulatory system for the nation's financial institutions.
Secretary Paulson's proposal would have three types of regulators. One would be based at the Federal Reserve to monitor the overall stability of the banking and securities universe; a second regulator would look at the stability of individual businesses; and a third would be aimed at consumer protection. However, Paulson warns the plan -- which would require congressional approval for its biggest changes -- should not be implemented immediately so as not to burden the market. David John, a senior research fellow at the Heritage Foundation, says Paulson's plan brings the regulatory system into the 21st century. "What he is really doing is starting a debate that is going to go on, oh, probably for the next several years or so," he explains. John says Paulson has hit an important point and that is "what we have had in the past is not working." And he agrees with Paulson that "[i]t's not a matter of more regulation, it's a matter of improving the regulation that we've got now and seeing that it fits today's realities." Among other things, Paulson's plan would give the Federal Reserve more power to protect the stability of the entire financial system while merging day-to-day bank supervision into one agency. It would also create a federal Mortgage Origination Commission to set recommended minimum licensing standards for mortgage brokers. According to John, although it is important to rearrange the regulatory agencies, something else is even more necessary -- and that is to move gradually from one type of regulation that is driven by a checklist, to one that is goal-driven and more flexible. But John points out that unfortunately for many people, including Senate Majority Leader Harry Reid (D-Nevada), "more financial regulation is better, whether or not it's something that just looks good in a [public relations] interview."
If you believe OneNewsNow.com is an important source for Christian news, please consider a small tax-deductible gift for this service.
