US Proposes Overhaul of Banking System
March 31, 2008
In what is being hailed as the largest regulatory change in the US banking system since the great depression, Treasury Secretary Paulson presented a sweeping proposal today detailing the planned changes. In order to properly regulate the financial stability of the US as a whole, Paulson believes that the Fed should take a more proactive approach to managing the liquidity and leverage of US financial institutions. Additionally, Paulson outlined a plan to implement a federal mortgage committee, who will be charged with regulating individual states’ adherence to proper lending practices. Paulson believes that more oversight is necessary to deal with the increasingly complex financial landscape in order to preemptively mitigate future problems. The sweeping plan has yet to be set into place by congress, and is expected to undergo intense scrutiny before it is adopted.