Three years ago, Federal Reserve Bank Chairman Ben Bernanke declared that: “It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms. If we achieve nothing else in the wake of the crisis, we must ensure that we never again face such a situation.”
He made that statement in March 2010; are you concerned about the subsequent pace of reform? Although the wheels of government may grind slowly, they are indeed propelling the engine of regulation forward.
Last week, for instance, Secretary of the Treasury Jacob Lew and his Financial Stability Oversight Council finally agreed to propose that certain “too big to fail” firms be placed under the same governmental oversight entities as global banking institutions.
Which firms? Lew didn’t say, but analysts believe that insurance companies and financial divisions of industrial companies could be declared “systemically important” and thus subject to federal oversight.
Should American citizens be pleased by this progress, or peeved at the length of time that has been required to simply generate this proposal? Indeed, at the present time, it is merely a proposal with no guarantee of conversion into regulatory law.
And yet, coming on the heels of the news that British and American authorities are finally preparing to file criminal charges against the (alleged) perpetrators of the global banking Libor scandal, Lew’s recommendation serves as a signal that the reform movement is making progress. Perhaps slow progress, but progress nevertheless.