Ididar Tzan wrote:

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Well, to explain myself more, in one breath the article says that they are making new agencies for oversight and giving the Treasury new powers to cope with these sorts of problems .... but then the article also mentions that the "over-regulation" causes problems with competition. So, what are they doing? Lowering regulations so the lending insitutions can be more competitive or adding regulation to prevent more breakdowns? I got confused. Maybe this is by design.

I was a bank VP for 19 years, for what is known as a 'National Bank'. We were regulated (constantly) by the Fed, the Office of the Comptroller of the Currency, and the Commonwealth of Massachusetts. (Mind you, my job had nothing to do with lending money, I managed the main MIS. Even at that, there were times when I saw more of various regulators than I did my own staff.)

One of the good things (as far as I can tell) that they are trying to do is combine some of this regulatory activity into fewer entities. That would be a huge improvement, all the regulators are doing the same thing, attempting to ensure that the bank is fulfilling it's fiduciary responsibilities. Another huge improvement will be to begin regulating enterprises that are not banks (and therefore have not been subject to the same scrutiny).

Just as an aside, though, I will say that the folks from the OCC were head and shoulders above the quality of the Fed regulators. Hopefully, they'll pick up the caliber of the actual field examiners.