adrock3215 Posted March 31, 2008 Report Share Posted March 31, 2008 (edited) Mr. Paulson has proposed an initiative overseeing the largest increase in government power over financial markets in some time. Some things from the article: The regulatory blueprint proposes eventually vesting new powers in the Federal Reserve as a "market stability regulator" -- effectively formalizing a role the central bank already has started to perform recently by expanding the list of financial firms who can borrow directly. It would give the Fed authority to demand that all financial system participants supply it with full information on their activities and grant the Fed a right to collaborate with other regulators in setting rules for their behavior. Among changes, the Treasury wants to merge the Securities and Exchange Commission, the U.S. markets watchdog, with the Commodity Futures Trading Commission, which is charged with overseeing the activities of the nation's futures market. In one important change to try to clamp down on mortgage brokers, the Treasury is urging the establishment of a "Mortgage Origination Commission" made up of regulatory agency representatives that would be able to set licensing standards for mortgage brokers. What do you all think of these new developments? They all seem poorly reasoned. Merging the SEC and CTFC is an idea that doesn't make much sense. What do the commodities and futures markets have to do with the mortgage crisis? But particulary harmful will be the expansion of Fed powers. That is what caught my attention from his proposal. The Fed's power over markets has been steadily increasing since the Federal Reserve Act. What exactly is a "market stability regulator"? The answer of late seems to be that it is a team consisting of Fed/Treasury/White House officials who come to the rescue whenever the S&P or Dow futures point to a lower market-open. Between 8 and 9 AM EST some official will come out with a statement such as this one which sends the market higher before opening. The financial markets, particulary commodity and futures markets, are the last relatively free markets on the planet. This plan is another step toward socializing those markets. And this coming from Mr. Free Markets Paulson, who, by the way, helped to engineer a part of this "credit crisis" when he was head at Goldman Sachs. Edited March 31, 2008 by adrock3215 Quote Link to comment Share on other sites More sharing options...
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