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Deck chairs secure aboard USS Financial Regulation
March 21, 2010 / 3:21 PM / 8 years ago

Deck chairs secure aboard USS Financial Regulation

By Kevin Drawbaugh - Analysis

WASHINGTON (Reuters) - The big government agencies in charge of policing banks and markets, despite being excoriated over the severe 2008-2009 financial crisis, have successfully dodged a major structural shake-up.

While Congress may yet clamp down on the financial industry from Wall Street to Main Street, a top-to-bottom overhaul of the nation’s regulatory apparatus -- which seemed like a certainty a year and a half ago -- is not going to happen.

As political reality has tempered reform proposals, plans to reconfigure a patchwork bureaucracy stitched together over decades have faded from view, with just one agency closure still on the negotiating table.

Only the Office of Thrift Supervision -- smallest and newest of the big seven agencies -- is likely to be closed with regulatory reform bills in both the Senate and the House of Representatives targeting it for shutdown.

Otherwise, thousands of workers will stay in place at the Securities and Exchange Commission, the Federal Reserve, the Office of the Comptroller of the Currency and other agencies ensconced in stately, federal buildings across Washington.

Some of their work assignments may change -- if Congress actually produces a bill this year and President Barack Obama signs it.

The Fed, for instance, would get some new responsibilities under legislation offered by Senate Banking Committee Chairman Christopher Dodd and under a sweeping House reform bill.

So might the Federal Deposit Insurance Corp, the Commodity Futures Trading Commission and the secretary of the Treasury, who could become the chairman of a new inter-agency council to monitor “systemic risk.”

But these changes, if ultimately approved, would signify a retreat from bold restructuring plans that were put forward by both Democrats and Republicans as far back as the turbulent final months of the Bush administration and right into Obama’s early days in office at the start of last year.

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