The Obama Administration plans to release new regulations for the country’s financial industry tomorrow. Under the new plan, the Federal Reserve will act as a systemic risk regulator. That will allow the Fed to monitor large financial institutions in trouble, such as AIG and major investment banks.
Michael Crittenden, reporter for Dow Jones newswires, told KPCC’s Larry Mantle that the Fed’s new powers will help prevent faltering firms from harming the economy.
Michael Crittenden: “They also want to give the government the ability to deal with a firm like Lehman Brothers – as we all remember from last fall when they started to tumble, the government really had their hands tied. So they want to make sure that if a firm can ruin the economy that the government has the ability to go in there and, you know, head off trouble.”
The White House plan is intended to streamline and consolidate regulatory agencies, and to include protections for consumers and investors.