What's Getting a Hearing This Week
The big economic policy event this week will be Treasury Secretary Timothy Geithner's dual appearances on Thursday before the Senate Banking Committee and the House Financial Services Committee. The plan is for Geithner to lay out the administration's proposal for regulating the financial system. Of course, we are likely to know most of the proposal before Geithner's appearance. I summarized the latest rumors Friday; one key development is that plans to dramatically consolidate regulatory agencies have been scaled back, although the Office of Thrift Supervision may still disappear.
More important than what the administration asks for will be how much effort it is willing to put into getting it. Financial regulation involves turf battles not only between regulatory agencies but also between congressional committees and heavyweights such as Christopher Dodd, Charles Schumer, and Barney Frank. The Obama administration has so far seemed to favor compromise over battle, and when it comes to financial regulation recent developments indicate that the administration does not have any particularly strongly held positions, only general principles such as those laid out by National Economic Council Director Larry Summers.
The House Financial Services Committee will be studying insurance regulation on Tuesday; Paul Kanjorski, chair of the capital markets subcommittee, is already on record favoring a federal government office to monitor the industry and watch for signs of systemic risk. The insurance industry has historically been regulated at the state level, and many (though not all) insurance companies are perfectly happy with this state of affairs, so this is likely to provoke a battle.
Since this is the key time to be influencing the debate over financial regulation, we will also be continuing to bring you our series of external perspectives on the topic. So far we've hosted Lawrence Baxter and Joel McPhee, David Zaring, Dan Immergluck, Brett McDonnell, and Mark Thoma, and today we'll be hearing from Arnold Kling of EconLog.
Let us know what other perspectives on financial regulation you'd like to hear.
June 15, 2009; 7:30 AM ET
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