WH: Financial Overhaul Plan Is Cautious
By Ben Pershing
President Obama this afternoon will lay out a proposal for an ambitious, sweeping overhaul of the financial regulatory system that, if you subscribe to the message coming out of the White House in the last 24 hours, isn't nearly as ambitious or sweeping as it could have been.
Obama's plan "will touch almost every corner of financial markets, from tougher consumer-protection policies to stricter rules over exotic financial products, such as credit derivatives," the Wall Street Journal says. It would give the Federal Reserve more leeway to prevent future breakdowns in the markets (paging Ron Paul!), endow the government with more power to take over ailing financial firms, bolster consumer protections and impose new regulations on financial instruments like mortgage-backed securites.
And yet the primary administration message this morning seems to be this: We showed restraint. "Senior officials debated using a bulldozer to clear the way for fundamental reforms but decided instead to build within the shell of the existing system, offering what amounts to an architect's blueprint for modernizing a creaky old building," according to the Washington Post. The New York Times calls the plan the product of "weeks of meetings" with various interest groups, one that "results from many compromises with industry executives and lawmakers, and is not as bold as some had hoped." All of this is probably true, but it's also the angle that best helps the administration calm financial markets and reassure the public that none of this is too radical. If you don't like all this government meddling, the story goes, be aware that it could have been much worse!
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