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Moving forward on financial reforms
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Steve Chiotakis: Meanwhile, here at home, Secretary Geithner and others from the Obama administration are moving forward with plans to clean up the financial system. The goal: to reverse the financial fallout quickly, and avert another one from taking place. From North Carolina Public Radio, here’s Marketplace’s Janet Babin.
Janet Babin: The changes would give more power to the Federal Reserve to regulate financial institutions.
The Wall Street Journal reports that the Treasury Department wants some kind of oversight of big hedge funds. And the government would monitor bank clearing systems — how money gets funneled from one institution to another.
Banks would also have to come up with more cash reserves, in good times and bad. Right now, banks don’t need as much capital when markets are doing well. Congress would have to OK some of the changes, like whether the government could step in and take over a financial institution that’s failing.
I’m Janet Babin for Marketplace.