From a cheering Associated Press:
Administration unveils financial system overhaul
By Martin Crutsinger, AP Economics Writer
WASHINGTON – The Obama administration on Thursday unveiled a sweeping overhaul of the financial system designed to impose greater regulation on major players like hedge funds.
Treasury Secretary Timothy Geithner told lawmakers that the changes are needed to fix the flaws exposed by the current financial crisis, the worst to hit the country in seven decades…
The administration’s proposal, which will require congressional approval, would represent a major expansion of federal authority over the financial system. It would impose tougher standards on financial institutions judged to be so big that their failure would represent a risk to the entire system.
It also would extend federal regulations for the first time to all trading in financial derivatives, exotic financial instruments such as credit default swaps that were blamed for much of the damage in the meltdown.
The administration also wants larger hedge funds to be required to register with the Securities and Exchange Commission.
In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions. Geithner did not designate where such authority should reside, but the administration is expected to support awarding this power to the Federal Reserve.
The plan also includes a measure that Geithner and Fed Chairman Ben Bernanke discussed before the committee on Tuesday to give the administration expanded powers to take over major nonbank financial institutions, such as insurance companies and hedge funds that were teetering on the brink of collapse…
The administration, pushing for quick action on its reform agenda, sent Congress a 61-page bill dealing with the expanded powers to seize control of nonbank institutions late Wednesday.
The House committee, chaired by Rep. Barney Frank, D-Mass., has indicated it could move on the measure as early as next week…
Geithner on Thursday provided only a broad outline of the other proposals. Many thorny details will need to be worked out.
Administration officials promised that the remaining issues would be hammered out in consultation with Congress with the goal of getting legislation approved as quickly as possible…
Gosh, what will the Democrat party do for funding if they crack down on hedge fund manipulators like George Soros?
And where will they find other high-paying jobs for their children, like Chelsea Clinton?
In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions.
Hopefully that vital job will go to someone with the integrity of a Rahm Emanuel or a Barney Frank or a Chris Dodd or a Maxine Waters.