Plan for Single Bank Regulator Gets Closer

The new regulator is one of the main features of a revamping of financial markets rules, including oversight of credit default swaps, a multi-trillion dollar market that has been a huge profit machine for banks like Goldman Sachs (GS Quote), JPMorgan Chase (JPM Quote) and Morgan Stanley(MS Quote), but which forced AIG (AIG Quote) to become the largest recipient of federal bailout money in the current crisis.

The Obama administration isn't expected to propose getting rid of the so-called dual banking system in which the banks are overseen by a mix of state and federal regulators.

Instead, the Journal notes, the new regulator would serve as a secondary set of eyes for the more than 5,000 state regulated banks and the primary regulator for the nationally chartered banks and thrifts, with the objective of streamlining supervision of banks. Senior writer Dan Freed contributed to this report.