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Obama to Launch Radical Bank Reform

Changes will be the most ambitious since the Great Depression

By Wesley Oliver, Newser Staff

Posted Jun 14, 2009 9:51 AM CDT

(Newser) – President Obama will unveil next week sweeping new changes to the nation’s governance of troubled financial institutions, the AP reports. Unlike Washington’s temporary ownership stake in automakers and major financial companies, the new regulatory protocol will be permanent and will present the most ambitious revision since the 1930s. Most likely to benefit from the changes will be the Federal Reserve.

Fed chief Ben Bernanke would become the overarching “systemic risk” regulator, monitoring financial institutions for stresses and preventing them from choking the entire system. The rules are designed to update the 20th-century regulatory structure to fit the 21st-century system of high-stakes swaps and trades. Debate will continue, though, as some call the changes too timid; others, too strict.

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President Barack Obama is ready to roll out an overhaul of the intricate rules and systems that govern America's troubled financial institutions. (AP Photo/Haraz N. Ghanbari)

Fed chief Ben Bernanke would become the overarching "systemic risk" regulator in President Obama's plan to overhaul rules governing the financial system. (AP Photo/Ron Edmonds)

Fed chief Ben Bernanke would become the overarching "systemic risk" regulator in President Obama's plan to overhaul rules governing the financial system. (AP Photo/Susan Walsh/file)

President Barack Obama reacts during a memorial service at the American Cemetery in Colleville-sur-Mer, Normandy, France, on the 65th anniversary of the D-Day landings, Saturday June 6, 2009. (AP Photo/Peter Macdiarmid/PA)

President Obama is ready to roll out an overhaul of the intricate rules and systems that govern America's troubled financial institutions. (AP Photo/Pablo Martinez Monsivais)

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Imagine today's financial transactions as an athletic contest where the referees have lost their vantage point. Plays occur out of their sight and fouls go undetected. Some referees halt play while others let it go on. - Jim Kuhnhenn, AP

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Obama to Launch Radical Bank Reform