Treasury Secretary Henry Paulson came forward today with the most far-ranging overhaul of the financial regulatory system since the stock market crash of 1929. Among the features of the plan, reports Martin Crutsinger for the Associated Press, are:
- It would give the Federal Reserve more power to protect the stability of the entire financial system and merge day-to-day bank supervision into one agency (currently, there are five).
- One super agency would be in charge of business conduct and consumer protection.
- It would ask Congress to establish a federal Mortgage Origination Commission to set recommended minimum licensing standards for mortgage brokers. Many currently operate outside of federal regulation.
Democrats say that the plan doesn’t go far enough to deal with abuses within the mortgage lending system and securities trading.
Financial ETFs appear to be feeling positive about the efforts so far in trading today. Both the Financial Select Sector SPDR (XLF) and the iShares Dow Jones US Financial Services (IYG) are up almost 2%. Will the good vibes continue?
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