Obama Wants Nationalized Banking and More - much, much more...

Why doesn't Obama just come right out and say he wants to control all businesses? That's what he's attempting to do. Somehow this power grab has got to stop.
Rees

From Yahoo! News:
By Anne Flaherty
Associated Press Writer
May 9, 2009

WASHINGTON – The White House told industry officials on Friday that it is leaning toward recommending that the Federal Reserve become the supercop for "too big to fail" companies capable of causing another financial meltdown.

According to officials who attended a private one-hour meeting between President Barack Obama's economic advisers and representatives from about a dozen banks, hedge funds and other financial groups, the administration made it clear it was not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators.

"The idea of having a council of regulators was pretty much vetoed," said one participant.

Treasury Secretary Timothy Geithner, who briefly attended the meeting but did not identify the Fed specifically as his top choice, told the group that one organization needs to be held responsible for monitoring systemwide risk. He said such a regulator should be given better visibility into all institutions that pose a risk to the financial system, regardless of what business they are in.

"Committees don't make decisions," Geithner told the group, according to another participant.

Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.

The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation that the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the July 4th recess.

The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.

A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner's position that he wants a "single independent regulator with responsibility for systemically important firms and critical payment and settlement systems."

A spokesman said Geithner also is open to creating a council to "coordinate among the various regulators, including the systemic risk regulator."

Industry officials say such a council would likely serve as advisers and would not be given the authority that a "systemic risk regulator" would.

The Fed itself hasn't taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.

Geithner said Friday the administration plans an "aggressive" package of reforms for the financial system including proposals to fundamentally overhaul how financial institutions pay their senior executives. Critics have charged that the bonus system used at many major institutions encouraged excessive risk taking.

"We had a financial system that did a terrible job of protecting consumers, of building a strong, stable financial system less prone to crisis and we are going to have to fix that," Geithner said in an interview on PBS' "Newshour." "You will see this president, this administration bringing sweeping reforms to our financial system."

In a speech Thursday, Bernanke said that huge, globally interconnected financial firms whose failure could endanger the U.S. economy should be subject to "a robust framework for consolidated supervision."

Naming the Fed as a kind of super regulator is likely to run into at least some resistance by other federal regulators and in Congress.

Mary Schapiro, the head of the Securities and Exchange Commission, said Friday that she was inclined to support the idea floated this week by the head of the Federal Deposit Insurance Corp. for a new "systemic risk council" to monitor large institutions against financial threats. The council would include the Treasury Department, Federal Reserve, FDIC and SEC, according to the proposal by FDIC Chairman Sheila Bair.

Speaking to the Investment Company Institute, the mutual fund industry's biggest trade group, Schapiro said she is concerned about an "excessive concentration of power" over financial risk in a single agency.

Lawmakers are divided on whether the Fed alone should assume the role of systemic regulator. Some say the Fed failed to prevent the current economic crisis and shouldn't be trusted with such a big responsibility. Others say the Fed should stay focused on its primary duty of setting monetary policy.

Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, said this week he is "more attracted to the council idea" than having a single regulator play that role.

Unlike other regulatory agencies, the Fed does not rely on appropriations from Congress for its operating funds. It finances itself through its investments.

Fed Gov. Daniel Tarullo told Congress in March that the extent to which the new responsibility for systemic risk should fall to the central bank "depends a great deal on precisely how the Congress defines the role and responsibilities of the authority."

"Any systemic risk authority would need a sophisticated, comprehensive and multidisciplinary approach to systemic risk," he testified. "Such an authority likely would require knowledge and experience across a wide range of financial institutions and markets."
Click to read the rest of the article