Wednesday, June 17, 2009

Obama On Regulatory Reform, Admits Unemployment Will Reach 10%, Rep. Cantor Responds (Video)

Bloomberg has a preview on President Obama's speech plan to overhaul the nation's regulatory structure.

June 17 (Bloomberg) -- The Obama administration plans to restrict the Federal Reserve’s emergency-lending powers while endowing it with authority overseeing systemic risk, ushering in what may become the Fed’s biggest overhaul in decades.

President Barack Obama’s proposal on financial regulation, to be released in Washington today, would force the central bank to get written approval from the Treasury before it extends emergency funding, according to a copy of the document obtained Bloomberg News. Obama also calls for a study of the Fed’s governance structure, including how it regulates financial firms.

The move is part of a proposal that would alter almost every facet of federal rules for the industry, aiming to prevent the regulatory lapses and risk build-up that led to the worst crisis since the Great Depression. Much of the plan will require approval in Congress, where jurisdictional battles and ideological clashes may delay and alter the legislation. Obama aims to sign a bill by the end of the year.

“We have to have somebody who is responsible for seeing the risks of the system as a whole and not just individual institutions,” Obama said yesterday in an interview with Bloomberg News, referring to making the Fed the systemic risk regulator. “The Fed is best positioned to do that.”

On Bloomberg this morning, House Republican Whip Eric Cantor (R-VA) discussed the Administration's new financial regulations to be announced today.

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