Today, the Treasury Department released their framework for Financial Regulatory Reform. The 89 page document is a comprehensive list of new reforms being considered by the Obama Administration. The five main goals of the Treasury’s proposed changes are:
1.Promote Robust Supervision and Regulation of Financial Firms
2.Establish Comprehensive Regulation of Financial Markets
3.Protect Consumers and Investors from Financial Abuse
4.Provide the Government with the Tools it Needs to Manage Financial Crises
5.Raise International Regulatory Standards and Improve International
Cooperation
One of the most striking proposals in the document is the vast increase in the powers of the Federal Reserve. In fact, in the first 38 pages alone, there are over 40 mentions of new powers the federal reserve assumes resulting in what the document calls the “the biggest changes to the Federal Reserve’s authority in decades.”
Its worth a read, find it here.
I think, rather than giving the Fed 39 new powers, or whatever it is, the bulk of our financial system problems could be eliminated by taking just one power away– the power to print money when a Treasury Bond auction doesn’t sell out. That would rapidly curb deficit spending, especially impossible levels of such as are being created today.