There are a handful of good ideas in some of the latest proposals floating around: Consolidate all of the banking oversight into one super regulator to prevent forum shopping. Then give that regulator teeth. (I suggest the FDIC is the best office to do this in).
Here are some of the proposals under discussion:
“Strip the Federal Reserve of regulatory powers over all but the very largest banks, those with more than $100 billion in assets, people briefed on the negotiations said on Monday night.
The plan would remove Fed oversight from all but 23 of the 4,974 bank holding companies, which have a collective $16.7 trillion in assets, and from 874 state-chartered member banks that are members of the Fed system and that have a total of $1.7 trillion in assets.
The vast majority of the bank holding companies would be overseen by a regulatory agency formed from a merger of the Office of the Comptroller of the Currency, which oversees national banks, and the Office of Thrift Supervision, which regulates savings and loans, the individuals said. Regulation of the state banks would go to the Federal Deposit Insurance Corporation, which already oversees about 5,000 banks that are not part of the Fed system.”
Perhaps the rationale for the big banks staying under the jurisdiction of the Fed is that it somehow effects monetary policy through their primary dealers of US Treasuries.
But I don’t see why we want or need to keep the Fed overseeing even those 23 banks . . .
Fed’s Reach May Be Curbed Under Plan
NYT: March 8, 2010