President Obama has unveiled his reworking of the nation’s financial regulatory system, and some critics say while it’s a step in the right direction, it may not go far enough.
The financial overhaul announced today focuses beefing up the power of the Federal Reserve, creating new consumer protections and on bringing large financial institutions under greater scrutiny, as a way of avoiding the big collapses that set off last fall’s crisis. UConn economist Stephen Ross says he’s glad to see an expanded role for the Fed.
"They have some of the best economists and best finance academics in the country working in the federal reserve system. And it comes from that independence. If they weren’t as independent as they are, they wouldn’t have the expertise they have."
But he says he’s disappointed that there’s not more emphasis on simplifying the patchwork of regulators that currently oversee financial institutions.
"They’ve actually chosen not to engage in wholesale reform of banking regulations, which I think it too bad, but they’ve done it to increase the likelihood they’ll be able to win the big battle, which is regulating these non-bank large financial institutions which are viewed as too big to fail."
Hedge funds would have to register with the SEC under these proposals, and the insurance industry is also touched – the administration wants to see better federal coordination of insurance regulation.