That’s what Senator Dodd’s proposal is. He wants to create an entirely new regulatory agency to replace the Fed (a good idea) and the FDIC (a bad idea).
“A key Senate lawmaker is readying legislation that would dramatically redraw how the financial system is regulated, setting the chamber on a collision course with both the House of Representatives and the Obama administration, which have championed markedly different approaches.
The bill, which is being readied by Senate Banking Committee Chairman Christopher Dodd (D., Conn.), would strip almost all bank-supervision powers from the Federal Reserve and Federal Deposit Insurance Corp., according to people familiar with the matter. In their place, the bill would create a new agency in charge of supervising all banks and bank-holding companies, even the country’s largest and most complex institutions.
Mr. Dodd’s proposal also would create a powerful council of regulators, overseen by an independent White House appointee, charged with monitoring risks to the financial system.”
There are lots of proposals floating around, and very few of them — this one included — actually addresses the underlying cause of the crisis . . .
Clash Looms on Banks
WSJ, Nov. 5 2009