The US Treasury has revealed its blueprint for the biggest overhaul of regulation of the financial sector since the 1930s.
Critics have said that the credit crunch and resultant market turmoil made a strong case for change. But Treasury Secretary Henry Paulson rejected claims that existing regulations have led to the turmoil. And he said the plan should not be implemented until current difficulties roiling financial markets are resolved.
The plan would beef up the powers of the Federal Reserve, which earlier this month engineered the purchase of troubled investment bank Bear Stearns by JP Morgan. It would give it greater oversight of all kinds of financial institutions from hedge funds to insurance companies.
"Government has a responsibility to make sure our financial system is regulated effectively. And in this area, we can do a better job," Mr. Paulson said. The government says the proposals are an effort help US firms become more competitive in the global economy.
I don’t know why, but when they start things like that I can see a serious financial crisis coming …fast!