Obama Sets Tone for Regulation Reforms – WSJ.com
Mr. Obama confirmed that the overhaul, which he wants to complete this year, includes giving more power to the Federal Reserve to police large, systematically important institutions, allowing the government to break firms apart, implementing new rules for complex instruments and creating a new federal agency to oversee consumer products such as mortgages and credit cards.
The 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 plan would bring many of the products and companies that previously operated outside of the banking system under federal scrutiny.
To soothe lawmakers unhappy with the Fed’s growing power, the proposal also recommends capping it in some ways. The administration proposes the creation of a consumer-protection agency, which would have the ability to write rules related to mortgages, credit cards and other consumer products, takes away powers previously held by the central bank.