Secretary Geithner needs sweeping powers to do all kinds of things like take over financial institutions that the government thinks might possibly need taking over. So he needs to move fast … faster than fast. No time to look this deal over … quick. First this on Wednesday
Allowing the Treasury Department to take over a broader range of companies, such as large insurers, investment firms and hedge funds, would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators.
That’s long enough. Now this on Thursday:
The new rules will likely require financial institutions to hold more capital as a buffer against losses and will bolster risk-management standards. All told, the proposals would mean significant expansions of power for the Treasury, Federal Reserve and other regulators.
It isn’t clear which companies would be brought under this umbrella. Administration officials believe they could include banks’ parent companies, insurance conglomerates and certain hedge funds, among others. They said it would depend on a company’s size, leverage, reliance on short-term funding and role in the financial system.
Confused … don’t worry, but don’t dawdle either. Oh … and guess what won’t be regulated. The Democrats favorite cash cow and George Soros money maker … hedge funds.
One area where the U.S. is departing from its European allies is the Obama administration’s approach to hedge funds, private-equity firms and venture-capital funds. Mr. Geithner, in his remarks, said all firms over a certain size should register with the Securities and Exchange Commission and disclose certain information so government officials can determine whether their size or complexity puts the broader economy at risk. But he said the administration doesn’t seek to regulate hedge funds like banks.
So let me get this straight. The one unregulated part of the market, hedge funds, continue unregulated while we pile even more regulation on the regulated. Wait … times up … gotta move fast. More to do.
This is from Thursday’s hearings.