In the bowels of Wall Street and one year after the collapse of Lehman Brothers, President Obama outlines his vision for financial regulatory reform, including a new Consumer Financial Protection Agency and stronger accountability and oversight in the existing regulatory regime. [Transcript.]
But — see also health care — some wonder if the President is going far enough: “The problem with concentrating on the banking system is that it allows the administration to present an overly optimistic assessment of its actions…Taking credit for stabilizing the financial system after feeding it with massive amounts of federal money is like a teacher bragging about turning around the academic performance of a failing student after handing them all the answers to the big tests.“
Continues economist Nomi Prins, in an analysis that dovetails quite tellingly with the health-care situation:”A strong CFPA is a sensible plan…This proposal has drawn the most ire from the banking community, so you know it’s good…But Obama’s reforms do not strike deeply enough. The banking crisis has been subdued, not fixed, because of enormous amounts of government assistance. Ignoring that fact, and failing to overhaul the sector, leaves us open to another crisis. And the next round will be worse, because there is now so much more federal money invested in the banks.”