Geithner Proposes to Reinvent How the Financial World Is Regulated

Right wing pundits blabbing the usual "isms" comments without knowing anything about this topic. All this does is regulate non-bank financial services companies the way the banks are already regulated. This is not untoward or extreme. It just covers a few GAPING HOLES in our oversight of this broad sector. If all are under Treasury oversight, but examined by the FDIC and subject to FDIC controls, it would be a HUGE improvement.

Suggestion though - have the FDIC create a separate deposit insurance fund for these companies from the fund already in existence for banks. Different risk profiles and cost structures.....Don't mix apples and oranges.

Now - the last item - Reverse Gramm Leach Bliley - split banks, insurance companies, and hedge funds/derivitives/credit swaps divisions so all are separated again. The companies will be smaller, more easily regulated, and the risk profiles will be more easily identifiable to manage.

Time to put back in place the controls we established after the Great Depression that worked so well for 55 years - that were dismantled by Phil Gramm and all but eight people in Congress in the late 1990's. You can see what the following president and his rubber stamp Republican Congress gave the green light to - and there was nothing systemic to stop it.

There will be lots of screaming about this. There always is when castor oil has to be swallowed.

Dorfy of SC 1:16PM March 26, 2009