Key players in reshaping U.S. financial regulation
WASHINGTON (Reuters) - The cast of characters who will tackle the overhaul of America's financial regulation system ranges from the nation's first black president to the Securities and Exchange Commission's first female chair.
* Barack Obama, president-elect
The new U.S. president, taking office on January 20, wants to rein in the financial services sector after a free-wheeling period blamed by some for the capital crisis behind the recession. Many Democrats in Congress agree with Obama.
A reshuffle seems likely for the alphabet soup of agencies overseeing markets and banking. Decades of deregulation may be slammed into reverse by Obama, a community organizer and civil rights lawyer before entering the Senate in 2005.
"A free market was never meant to be a free license to take whatever you can get," he said in a New York speech in March.
Obama has suggested that in exchange for getting support from the U.S. government, financial institutions should be made subject to tougher capital and liquidity requirements.
* Ben Bernanke, Fed chairman
The soft-spoken, 55 year old studied the Great Depression in graduate school, preparing him for today's crisis.
Unlike his 1930s predecessors, Bernanke is turning on the money taps to flood the system with liquidity, while slashing interest rates to spur the economy and fight deflation.
Before taking the reins at the Fed in February 2006, he briefly headed President George W. Bush's Council of Economic Advisers. Before that, he had three years of service on the Fed Board, adding practical policy experience to his earlier theoretical work as an academic at Princeton University.
A sober-sided "gray man" in appearance, Bernanke is plain-spoken in contrast to predecessor Alan Greenspan, whose obscure policy pronouncements often left listeners perplexed.
Bernanke has dazzled markets with inventive tactics for adding liquidity through new lending "facilities" that make his pronouncements as closely watched as Greenspan's ever were.
* Henry Paulson, Treasury secretary
The bald, bespectacled former Goldman Sachs boss seemed briefly to be running Washington in September and October, as if he had elbowed aside lame-duck President George W. Bush.
Paulson, 62, seized control of struggling mortgage giants Fannie Mae and Freddie Mac and decided their fate. In typically forceful fashion, he sold Congress on a $700 billion bailout program meant to stabilize the global financial system.
That has not exactly gone according to plan. Indeed, it has changed directions with dizzying speed, making Paulson look like he was making policy on the fly. One thing is certain -- his efforts have changed U.S. conceptions of the appropriate role of government in the economy and left an imprint that will long be felt by Obama and congressional Democrats.
Paulson will not stay around long after Obama takes over on January 20. A multimillionaire and avid bird-watcher, Paulson has said little about his future, but is expected to continue philanthropic work in environmental and conservation areas.
* Timothy Geithner, Treasury secretary nominee
Like Obama, the nominee to be Treasury secretary has a reputation for being cool under pressure, spent some of his childhood in the Third World and plays pickup basketball.
Timothy Geithner, 47, seems to thrive on urgency. He played a big part in shaping U.S. policy during the Asian and Russian economic crisis in 1997-1998, when he was in his late 30s.
He served under former Treasury secretaries Robert Rubin and Lawrence Summers. As president of the New York Federal Reserve Bank since November 2003, he has worked closely with Bernanke and Paulson to prop up the financial system.
But his golden boy reputation was tarnished by his involvement in the decision to let investment bank Lehman Brothers fail, a step blamed by some for plunging an already fragile financial system into a downward spiral.
Still, Geithner was praised for being ahead of the curve in seeing the need for a central counterparty clearing house for derivatives, even if he came under some criticism for failing to foresee the depth of the fallout from the housing crisis.
* Mary Schapiro, SEC chairman nominee
Schapiro could be the first Securities and Exchange Commission chief to preside over the agency's demise.
That would be a daunting prospect for anyone, even a veteran like Schapiro, who has spent more than two decades advancing through America's financial oversight bureaucracy.
At 53, she was nominated last month by Obama to head an agency barraged by criticism that it seriously mishandled the gravest financial crisis since the Great Depression.
As Obama and congressional Democrats move this year to overhaul how Washington regulates Wall Street, banks and the debt markets, Schapiro, a lawyer, will be in the spotlight.
She was previously an SEC commissioner. She also chaired the futures-market regulating Commodity Futures Trading Commission. She most recently was chief executive of a brokerage watchdog group, the Financial Industry Regulatory Authority, or FINRA.
The fact that she worked at both the SEC and CFTC has led some to speculate that Obama plans to merge the two regulatory agencies -- an idea that has kicked around for years and has gained ground as talk of a massive overhaul has increased.
But others say Schapiro is not known as a reformer; that FINRA has a mediocre enforcement record; that she has spent too much time inside a badly broken system, and that she is not the breath of fresh air needed at the top of the SEC.
