US Federal Reserve given big reform role

US Federal Reserve given big reform role

(WASHINGTON) Some of the reforms proposed under President Barack Obama’s plan:

A new Financial Services Oversight Council of regulators led by the Treasury to identify emerging ’systemic’ risks and improve inter-agency cooperation.

New authority for the Federal Reserve to supervise all firms that could pose a threat to financial stability, even those that do not own banks.

Stronger capital and other prudential standards for all financial firms, and even higher standards for large firms.

A new National Bank Supervisor to supervise all federally chartered banks.

Elimination of the federal thrift charter and other loopholes that allowed some depository institutions to avoid bank holding company regulation by the Federal Reserve.

Registration of advisers of hedge funds and other private pools of capital with the SEC.

New requirements for market transparency, stronger regulation of credit rating agencies, and a requirement that issuers and originators retain a financial interest in securitised loans.

Comprehensive regulation of all over-the-counter derivatives.

New authority for the Federal Reserve to oversee payment, clearing, and settlement systems.

A new Consumer Financial Protection Agency to protect consumers across the financial sector from unfair, deceptive and abusive practices.

More powers for the SEC to strengthen protection for investors.

A new regime to resolve non-bank financial institutions whose failure could have serious systemic effects.

Revisions to the Federal Reserve’s emergency lending authority to improve accountability. — AFP

Source : Business Times - 19 June 2009

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