The Bush administration is proposing a sweeping overhaul of the way the government regulates the nation's financial services industry from banks and securities firms to mortgage brokers and insurance companies.
The plan would give major new powers to the Federal Reserve, a 22-page executive summary obtained by The Associated Press showed.
The Fed would be given broad authority to oversee financial market stability, including powers to examine the books of any institution deemed to represent a potential threat to the proper functioning of the overall financial system.
The proposal, which will be outlined tomorrow in a speech by US Treasury Secretary Henry Paulson, is certain to set off heated debate within different sectors of the financial services industry and in Congress, where some Democrats are likely to complain that the proposal does not go far enough to crack down on abuses.
The recommendations are the product of a yearlong review that was begun in an effort to modernize the government's regulatory structure so that the country's financial services industries could better compete in a fast-changing global economy.
The plan also seeks to address problems that have been brought to light in recent months since a severe credit crisis began roiling financial markets last August.
That crisis has already claimed as its biggest victim Bear Stearns, the nation's fifth-largest investment bank, which came to the brink of collapse before its purchase by JP Morgan Chase & Co.
"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years," Paulson will say in his remarks.
But the plan does seek to address problems highlighted by the current crisis, in which the Fed in an unprecedented move has begun making direct loans to securities firms in an effort to shore up a system badly shaken sour mortgage loans.
The proposal would allow the Fed, in its new role as "market stability regulator," to dispatch examiners to check the books of all segments of the financial services industry.
The administration proposal would also consolidate bank regulation by shutting down the Office of Thrift Supervision and transferring its functions to the Office of the Comptroller of the Currency, which regulates nationally chartered banks.
The role that Federal Reserve Chairman Ben Bernanke and his colleagues have been playing to shore up the financial system would be formalized by giving Fed officials greater power to detect where threats might be lurking.
Senator Charles Schumer, a New York Democrat, said he believed Paulson's plan offered some valid suggestions.
"In broad outlines, we agree with large parts of Secretary Paulson's plan," Schumer, chairman of the Joint Economic Committee, said in a statement.
"He is on the money when he calls for a more unified regulatory structure," he said.
Under Paulson's approach, the long-term goal would be to designate the Fed as market stability regulator and to have a financial regulator that would focus on financial institutions that operate with government guarantees.
Taiwanese Olympic badminton men’s doubles gold medalist Wang Chi-lin (王齊麟) and his new partner, Chiu Hsiang-chieh (邱相榤), clinched the men’s doubles title at the Yonex Taipei Open yesterday, becoming the second Taiwanese team to win a title in the tournament. Ranked 19th in the world, the Taiwanese duo defeated Kang Min-hyuk and Ki Dong-ju of South Korea 21-18, 21-15 in a pulsating 43-minute final to clinch their first doubles title after teaming up last year. Wang, the men’s doubles gold medalist at the 2020 and 2024 Olympics, partnered with Chiu in August last year after the retirement of his teammate Lee Yang
FALSE DOCUMENTS? Actor William Liao said he was ‘voluntarily cooperating’ with police after a suspect was accused of helping to produce false medical certificates Police yesterday questioned at least six entertainers amid allegations of evasion of compulsory military service, with Lee Chuan (李銓), a member of boy band Choc7 (超克7), and actor Daniel Chen (陳大天) among those summoned. The New Taipei City District Prosecutors’ Office in January launched an investigation into a group that was allegedly helping men dodge compulsory military service using falsified medical documents. Actor Darren Wang (王大陸) has been accused of being one of the group’s clients. As the investigation expanded, investigators at New Taipei City’s Yonghe Precinct said that other entertainers commissioned the group to obtain false documents. The main suspect, a man surnamed
The government is considering polices to increase rental subsidies for people living in social housing who get married and have children, Premier Cho Jung-tai (卓榮泰) said yesterday. During an interview with the Plain Law Movement (法律白話文) podcast, Cho said that housing prices cannot be brought down overnight without affecting banks and mortgages. Therefore, the government is focusing on providing more aid for young people by taking 3 to 5 percent of urban renewal projects and zone expropriations and using that land for social housing, he said. Single people living in social housing who get married and become parents could obtain 50 percent more
DEMOGRAPHICS: Robotics is the most promising answer to looming labor woes, the long-term care system and national contingency response, an official said Taiwan is to launch a five-year plan to boost the robotics industry in a bid to address labor shortages stemming from a declining and aging population, the Executive Yuan said yesterday. The government approved the initiative, dubbed the Smart Robotics Industry Promotion Plan, via executive order, senior officials told a post-Cabinet meeting news conference in Taipei. Taiwan’s population decline would strain the economy and the nation’s ability to care for vulnerable and elderly people, said Peter Hong (洪樂文), who heads the National Science and Technology Council’s (NSTC) Department of Engineering and Technologies. Projections show that the proportion of Taiwanese 65 or older would
RSS