Obama Reg Reform Plan is Victim of Distraction

[Dover]

American Banker
Thursday, July 23, 2009


WASHINGTON — Just more than a month after President Obama unveiled it, an ambitious plan to reform the regulation of the financial system is being eviscerated.

Key elements including handing the Federal Reserve Board power to monitor systemic risks and eliminating thrift and other specialty charters, appear dead. Legislating the authority to unwind troubled nonbanks — once a top priority — has fallen by the wayside. And House Financial Services Committee Chairman Barney Frank acknowledged Wednesday that bankers had made significant progress in lobbying against a centerpiece of the effort, a new consumer protection agency.

Critics and proponents alike agreed the problem is that the administration and lawmakers are simply trying to accomplish too much at the same time. Most noted that President Obama and Senate Banking Committee Chairman Chris Dodd are more focused on health-care reform.

"The administration is trying to do too much," said Paul Miller, an analyst with Friedman, Billings, Ramsey. "They are trying to revamp health care, energy and financials all in one year. … Obama's plate is very big and the political process is not made to move that fast." (except when the banks want a bailout!) ..cont'd

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