RTTNews - President Barack Obama will propose the most sweeping overhaul of the US regulatory system since the Great Depression Wednesday.
According to the White House, the President's plan will require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation.
Financial institutions have an obligation to themselves and to the public to manage risks carefully, Obama said in prepared remarks. And as President, I have a responsibility to ensure that our financial system works for the economy as a whole.
The Federal Reserve will be be granted new authority for regulating bank holding companies and other large firms that pose a risk to the entire economy in the event of failure.
We are working hard to build a new foundation for sustained and lasting growth, said the President. This new foundation also requires strong, vibrant financial markets, operating under transparent, fairly-administered rules of the road that protect America's consumers and our economy from the devastating breakdown we've witnessed in recent years.
As expected, Obama will announce the creation of a Consumer Financial Protection Agency , which will focus on protecting consumers in credit, savings, and payment markets.
Consumers will be provided information that is simple, transparent, and accurate, Obama said. The most unfair practices will be banned. Those ridiculous contracts - pages of fine print that no one can figure out - will be a thing of the past. And enforcement will be the rule, not the exception.
Obama will also proposing comprehensive regulation of credit default swaps and other derivatives that have threatened the entire financial system.
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