House debates merging regulators
U.S. Treasury Secretary Timothy Geithner testifies before the Congressional Oversight Panel of the Troubled Asset Relief Program on Capitol Hill in Washington, D.C.
TEXT OF STORY
Bill Radke: It's the eve of the G20 summit in Pittsburgh, when 20 industrial nations meet to talk about rebalancing the world economy. Ahead of that meeting, the European Commission today laid out some proposals. They want to set up a Systemic Risk Board that would act on threats to the E.U. economy. This is not going over too well in Europe's biggest financial center. London bankers and politicians are reluctant to give power to the European Union.
Well, those debates are breaking out in Washington, too. Today, the House Financial Services Committee is beginning two weeks of hearings on some highly-disputed banking reform. First on the witness stand this morning: Treasury Secretary Timothy Geithner. We get the story from Marketplace's Washington bureau chief, John Dimsdale.
John Dimsdale: The Treasury Secretary will defend a White House plan to merge two of the four federal regulators. But late last week, Senator Christopher Dodd went the White House one better. He wants to consolidate all four into one super regulatory agency.
Bad idea, says Ed Yingling with the American Bankers Association:
Ed Yingling: You will lose the debates you now have among regulators, which is valuable. It's great to have one regulator if that regulator is right, but it's terrible if it's wrong.
Banks aren't the only roadblocks -- current regulators don't want their power diminished.
Baldwin-Wallace College professor Kevin Jacques spent 14 years at the Treasury Department:
Kevin Jacques: In Washington, D.C., power and authority is a commodity. They're not going to like a consolidation of the regulatory agencies into one, because that means there's going to be agencies that win and agencies that lose.
Given all the resistance, Jacques expects only talk and no action this year.
In Washington, I'm John Dimsdale for Marketplace.