US Regulatory Reforms

The U.S. Treasury Department released a policy proposal paper entitled Financial Regulatory Reform  A New Foundation: Rebuilding Financial Supervision and Regulation.  The goals of the reform are to:

 

(1) Promote robust supervision and regulation of financial firms

• A new Financial Services Oversight Council which brings together the heads of all financial regulatory agencies to identify emerging systemic risks and improve interagency cooperation.

• Stronger capital and other prudential standards for all financial firms, and even

  higher standards for large, interconnected firms.

(2) Establish comprehensive supervision of financial markets

 

(3) Protect consumers and investors from financial abuse

• A new Consumer Financial Protection Agency to protect consumers across the financial sector from unfair, deceptive, and abusive practices.

• Stronger regulations to improve the transparency, fairness, and appropriateness of consumer and investor products and services.

• A level playing field and higher standards for providers of consumer financial

  products and services, whether or not they are part of a bank.

• A new regime to resolve nonbank financial institutions whose failure could have serious systemic effects. 

(5) Raise international regulatory standards and improve international cooperation

 

With respect to regulation of insurance the proposals call for a National Approach via an Office of National Insurance. This is intended to improve and broaden the regulation of insurance companies and affiliates on a consolidated basis, including affiliates outside the traditional insurance business, and will offer consistent consumer protection for insurance products and practices. The Office of National Insurance will gather information, develop expertise, negotiate international agreements, and coordinate policy in the insurance sector.  The paper can be found at http://www.financialstability.gov/docs/regs/FinalReport_web.pdf