May 27, 2009 / 11:25 PM / 10 years ago

Obama admin wants Fed and FDIC in key roles: source

WASHINGTON (Reuters) - The Obama administration wants to designate the Federal Reserve as the new systemic risk regulator and give the Federal Deposit Insurance Corp authority to unwind bank holding companies, a source familiar with the administration’s proposal said on Wednesday.

The plan, which will be offered to U.S. lawmakers as a blueprint as they embark upon an overhaul of financial regulation, could be announced soon after June 8, the source said, speaking anonymously because the plan has not been widely shared.

The administration wants a consumer protection agency to supervise financial products, such as credit cards and mortgage-related products. Securities would not fall under the consumer supervisor’s jurisdiction, the source said.

The administration also wants an agency in charge of investor protection and market integrity, which would likely be a merged Securities and Exchange Commission and Commodity Futures Trading Commission.

The proposal also urges creation of a new government agency to conduct “prudential regulation,” with supervision authority over state and federally chartered banks, bank holding companies and insurance firms, the source said.

Reporting by Karey Wutkowski and Rachelle Younglai; Editing by Tim Dobbyn

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