Could This be the Next Financial Disaster?
by Dave Forest
Tuesday, 05 October 2010
I wrote last week about big changes coming to financial regulation in Europe.
Look for the sequel soon in the U.S. America is buckling down for a new era of financial rulemaking.
Case in point: on Friday, the newly-created Financial Stability Oversight Council met for the first time ever. This 11-person committee is made up of officials from the Department of Treasury, Federal Deposit Insurance Corp, the Federal Reserve, Securities and Exchange Commission and Commodity Futures Trading Commission (amongst others). Its mission is “identifying risks and responding to emerging threats to financial stability.”
The Oversight Council is going to be the “front line” in creating harder rules for the American financial system. The stated goal being to prevent another financial crash like the one in late 2008.
And the group is wasting no time getting started. One of items discussed at Friday’s meeting was increased oversight of non-bank financial firms.
There’s been a lot of criticism since the financial crisis over non-bank entities. The charge being that large financial conglomerates like AIG were allowed to carry out bank-like activities without being subject to the regulation that governs American banks.