Obama Plans to Cut Bank Regulators, Allow Fed to Supervise Financial Holding Companies

Reuters
June 16, 2009

The Obama administration plans to call for the U.S. Office of Thrift Supervision to close as part of its overhaul of financial regulation, which would also include the elimination of the federal thrift charter for banks.

The plan would require large, interconnected firms to draft a “credible plan” for how they would be unwound if they ran into severe trouble, a senior administration official told reporters on a conference call on Tuesday.

The official said the proposal would also call for the creation of a financial oversight council that would be led by the Treasury Department, and would make the Federal Reserve the consolidated supervisor of large financial holding companies.

The administration has been discussing how best to tighten bank and market regulation in response to the worst global financial crisis in generations. President Barack Obama will formally unveil the proposals on Wednesday.

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