White House Plans Unified Banking Regulator

New agency would replace hodgepodge of regulators blamed for financial crisis
By Rob Quinn,  Newser Staff
Posted May 28, 2009 4:49 AM CDT
The administration is considering plans for a unified bank regulator and an agency to police financial products offered to consumers.   (Shutter Stock)
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(Newser) – The Obama administration is working on plans to create a single agency to do the work of the mishmash of regulators who failed to see the financial crisis coming, the Wall Street Journal reports. The new agency, which may be proposed to Congress next month, would strip powers from the Federal Deposit Insurance Corporation and Federal Reserve. The Fed would gain new powers to guard against systemic risks.

Experts say much of the blame for the financial crisis lies with the current regulatory system, in which banks can effectively choose which federal agency oversees them. The new agency is the center of the administration's wider plan to overhaul the financial industry, insiders tell the Washington Post. The proposal is likely to meet fierce opposition from the banking industry, which favors streamlining the existing regulatory framework, and from states fearful of losing jurisdiction.