The creation of a financial watchdog agency is among the new proposals Pres. Obama is expected to announce today. Its purpose will be to enforce consumers’ interests from financial misconduct. The plan will also give the government authority to take control of companies that pose a risk to the entire industry.
By DAMIAN PALETTA
WASHINGTON — President Barack Obama is expected Wednesday to propose the most sweeping reorganization of financial-market supervision since the 1930s, a revamp that would touch almost every corner of banking from how mortgages are underwritten to the way exotic financial instruments are traded.
At the center of the plan, which administration officials are referring to as a “white paper,” is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies — much like the Federal Deposit Insurance Corp. does with failed banks — and create a new regulator for consumer-oriented financial products, according to people involved in the process. READ THE REST