WASHINGTON (CNN) - One of President Obama's leading economic advisors called Wednesday for major changes in the way the financial system is regulated - especially firms whose failure could sink the nation's troubled economy - and warned that this oversight would come with a major price tag.
“It’s not going to be cheap,” Paul Volcker told the Senate Banking Committee Wednesday, suggesting that it would cost "billions of dollars" more.
Volcker, chairman of the President’s Economic Recovery Advisory Board and former Federal Reserve Board chairman, called for radical changes in the regulation of the country’s financial system. His recommendations were based on the global financial report, “Financial Reform: A Framework for Financial Stability.” The report was released in January from the Group of Thirty (G30), a committee he co-chaired that included Treasury Secretary Timothy Geithner and Director of the White House National Economic Council Larry Summers.
He said Fannie Mae and Freddie Mac's status as hybrid public-private enterprises should come to an end. He also called for stricter disclosure standards for major hedge funds or equity funds.
Hours earlier, a money manager who sounded the alarm on Bernard Madoff told a House subcommittee the Securities and Exchange Commission was "never capable" of catching the alleged Ponzi scheme operator, and called for a new, more powerful regulator who would combine the powers of all the federal government's financial regulatory organs.
Volcker did not echo that recommendation, or release details on how these new regulations might be enforced. He told the committee the Federal Reserve should play “continuing role in promoting and maintaining financial stability,” though he did tell senators that he did not believe the Fed should assume chief oversight.
Good, hold Wall Street's feet to the fire and do whatever you have to do. We need a change and this is the time. Move forward and kick the naysayers out of the way.
Here comes the mark 666.... sometimes it's good not to be so efficient...
This is where a good house cleaning is needed. The financial regulatory system is a joke. I hope this system gets a serious U-Haul and President Obama is just the President to get the job done.
Hey – watch what you say. McCain and his anti-regulation "boys" will cry.
Makes me wonder what Valerie Jared was doing at Davo? Waste of taxpayers money already.
The Treasury Department and the SEC need a major overhaul.
And yes....... regulations need to be imposed on Wall Street Crooks!
As Jim Cramer said yesterday on his show "Mad Money" our new attorney general, Eric Holder, needs to enforce the laws of our Nation, and drag the sorry-butts of all the Crooks into court!
Heads need to roll on Wall Street!
It is lng over due. The free market corrects itself, yea right and I have a bridge in Alaska i will sell you. Some people are like sheep they forget what has transpiered the last 8 years and how we got hear. but let me remind you. Deregulating politicians Mostly republicans but some Dems too. Those clowns along with the Bush white house. Even Bush changed his stance there at the end.
I would first reset the financial industry to 1976 rules and work from there. Yes, it will cost $billions but we have lost $trillions and will continue to lose for some time. It seems our leaders are stuck on quick fixes instead of slowly doing things right!!!
This is getting ridiculous. How can all of these OLD politicians act with no concern for our generation and the generations that will follow. This will go down as the most financially irresponsible administration ever...it is sad, we all thought things were going to be different and we will all be remembered as fools
Most Americans are weary of Bailouts, and will probably resist any attempts to revise our "financial system" even if it's to their detriment. President Obama has a huge amount of "past blunders" (Bush) to amend. Therefore, people need to get off their high horses and leave him alone; especially Republicans journalists. I have never seen as much journalistic bias as is evident at this time. Republicans as a whole, have made The Drudge Report their new bible and Rush Limbaugh their god, so Thank God for KO.
Weather it's expensive to fix the financial system or not is not the question, I have lost over 50% of my life savings and at 64 years old living on a fixed income, I can't afford any more financial scandals.
The deregulation scheme was rigged for the insiders and us working stiffs got screwed.
Ad the cost as a TAX to these companies just like they do with all these little fees they add to our bills.
Woo! No way! Fannie and Freddie aren't working out?
Bush could have told you that. He tried to tell congress that in 2006. The democrats wouldn't hear it. Franks said everything was fine and he wanted to "roll the dice".
How'd that work out for us?
Oh I forgot.... it's all because of Bush and the Republicans and their failed economic policies that we keep hearing so much about. Mostly from Democrats who got huge contibutions from Freddie and Fannie.
Let's see how the dems do...
Your first challenge is to get Barney Frank to stop giving loans to people with 540 credit scores. He is responsible for the entire problem.
Bravo... bravo... bravo... at last! :) Put a muzzle on these fat cat wall street black hearted pirates!
If you want true reform on Wall Street and in our banking system, then just vote our Barney Frank, Nancy Pelosi, Senatorn Reid, Dodd, and Leahey, These are the three biggest obstacles to true reform. The reason – their greed and the ton of moey they take from Wall Street, the banks, Fannie Mae, the rating agencies, and the Insurance industry. Until you vote these obstructionists out of office, no amount of money will fix the oversight.
why doesn't president obama just put his stimulus package thru as an 'executive order' before america self destructs?