President Obama is pitching a new set of financial regulations which would, among other things, create a consumer financial protection agency and enact new rules for financial derivative products (like mortgage backed securities and collateralized debt obligations). You can take a look at a draft of the plan here (PDF), courtesy of the Wall Street Journal. We searched the web for some initial reactions to the proposal and found these:
“First, the new Consumer Financial Protection Agency seems like a big deal, and a good idea…We already have lots of regulations that decide how people get to live financially. It's just that right now they're all administered and in some cases written by agencies also charged with making sure banks are profitable. Guess what—protecting consumers and keeping banks profitable don't always go together. There's a lot to be said for separating the two tasks.”
Justin Fox, Time.com
"It's about time we had a government agency whose only job was to protect consumers in the financial market place…If such an agency existed five years ago, we might not be in the economic crisis we are in right now."
Travis Plunkett, legislative director for the Consumer Federation of America, via ABCNews.com
“That does not stifle economic activity, but rather it creates a stable framework within which market activity can take place. Given the kind of activity that we have seen in recent years, it seems clear that regulation is needed.”
Julian E. Zelizer, professor of history and public affairs at Princeton, via Politico
“Until Obama & Co. get to the heart of what caused this and many of the other financial crises that have threatened our livelihood during the past 40 years—namely, a compensation system on Wall Street that rewards taking big risks with shareholders' money in order to get big rewards for bankers and traders, free of all accountability—then the “problems that originated this crisis” will not be fixed at all. Rather, we will all just be biding our time until the next bubble is inflated and bursts anew.”
William D. Cohan, The Daily Beast
"If you look deeply...we'll have the federal government deciding what interest ought to be charged on credit cards, having the government decide what kind of financial products are available…I think it's just going to be too big of a foot on an industry that already is having financial problems."
Rep. John Boehner (R–Ohio), via the Associated Press
“Predicting the future is impossible. Trying to regulate future risk would take all of the capital creation power out of the financial industry. Regulation won't stop the next market mishap because no number of regulators can predict what that will be.”
Douglas A. McIntyre, DailyFinance.com
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