Regulators resist financial overhaul

TEXT OF INTERVIEW

Bill Radke: Some pushback today on financial regulatory reform. Top regulators will testify on Capitol Hill about the Obama administration’s plans to overhaul the regulation of the banking system. Marketplace’s Jeremy Hobson joins me now live from New York with more on that. Good morning, Jeremy.

JEREMY HOBSON: Good morning.

RADKE:So we’re expecting resistance to some of the administration’s ideas?

HOBSON:We are. We’ve seen some of the prepared remarks and there are some harsh words for the proposed reforms. For instance, the head of the Office of Thrift Supervision doesn’t think it’s good idea to get rid of the Office of Thrift Supervision and start up a new national bank supervisory agency. Also, the head of the FDIC, Sheila Bair, is expected to say today that putting all of the nation’s regulatory eggs in one basket is not a good idea.

RADKE: How unusual is this to have these regulators up there on Capitol Hill publicly challenging the boss?

HOBSON:It’s unusual, and some of it has to do with having little to lose. If your agency is on the chopping block, you might as well make your case. What’s interesting here is they’ve already been told not to do this. The Wall Street Journal reported on a meeting that was held last Friday with all these regulators and the Treasury Secretary Tim Geithner. And Geithner was reportedly using obscenities and really being tough with these people, telling them enough is enough, you’ve got to get behind the president on these regulatory reform goals.

RADKE:And just quickly, remind us what the administration’s regulation proposal would do?

HOBSON:Well, it would create a new consumer protection agency, which would be like another layer of regulation on top of the regulatory agencies that already exist. It would, as we said, consolidate a couple of bank regulators. And it would also give more power to the Fed to deal with institutions that could be risky for the whole system, and not surprisingly, Bill, the Fed is perfectly fine with that.

RADKE:Jeremy Hobson, live from New York. Thank you.

HOBSON:All right, thanks.