While They Have You Focused On AIG Bonuses…

…this is what you should be paying attention to:

U.S. to Toughen Finance Rules

The Obama administration, moving with increasing speed, has inked the main contours of its plan to revamp financial-market oversight — changes that will ripple through the economy, affecting everything from the operations of international banks to consumer protection.

The principles include giving the Federal Reserve new powers that include authority to monitor and address broad risks across the economy, say people familiar with the matter. The proposals are expected to include tougher capital requirements for big banks and authority for regulators to take over a large financial firm that is failing.

“We want to accelerate the pace of change on the reform agenda,” Treasury Secretary Timothy Geithner said in an interview after a meeting of the Group of 20 finance ministers and central bankers over the weekend. Mr. Geithner was pressed for action on the regulatory front at the meeting, held just outside London. The administration’s goal is to unveil its proposals before G-20 heads of state meet April 2, to wrest leadership of the thorny topic.

President Barack Obama has pitched a regulatory overhaul as a way to help forestall another financial crisis in the future. Many Democrats and some Republicans blame lax, misdirected or weak oversight in part for precipitating the current one. (The way to forestall another financial crisis is to abolish The Fed and have the government print it’s own currency with no interest/debt attached to it.)

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Mr. Geithner’s agenda closely resembles some of the priorities laid out recently by Fed Chairman Ben Bernanke and House Financial Services Committee Chairman Barney Frank (D., Mass.), both important players in determining whether the concepts become law. (An agenda that was proposed by Bernanke and Frank; two of the biggest problems in our government today.)

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“We are going to be ambitious, but we are going to work with them,” Mr. Geithner said.

A major component of the plan would be new clout for the Federal Reserve, which already runs monetary policy and has accumulated large new powers since the financial crisis began. (Let’s give more power to the people that caused the credit/housing crisis with too much money in circulation which created easy credit/debt — just like the roaring ’20’s.  Don’t believe me?  Look it  up!)

The balkanized structure of financial-services regulation has meant that no one institution had the ability to look broadly at markets to spot signs of systemic risk, such as huge bets made by investment banks on mortgage debt.

Mr. Geithner wants the Fed to have the authority to do so.

Make sure to go to the link and read the rest.

The basic rundown = MORE CONTROL…

Proposed Changes

Treasury Secretary Timothy Geithner will soon outline proposed changes in financial regulation. They are expected to include:

  • An enhanced role for the Federal Reserve to monitor and address broad economic risks.
  • Changes to the way banks are overseen to prevent lenders from shopping among regulators for the easiest supervision.
  • More transparency and stricter rules for the way money flows between banks.
  • Tougher capital requirements for big banks.
  • Consolidation of consumer-protection enforcement.

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