Obama's Financial Reforms: 5 Things You Need To Know (SLIDESHOW)

President Barack Obama announced sweeping new reforms for the financial industry today. The announcement had long-been anticipated by Wall Street and Capitol Hill, but the details are still quite up in the air.

That said, we've compiled five key things you need to know about Obama's plans for Wall Street. Check out our story on the Obama administration's proposed reforms, or view our SLIDE SHOW below:

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1. The Financial Services Oversight Council: President Obama wants to install a single agency that’s charged with overseeing the entire financial system -- and which would make sure that government regulatory bodies actually work together. Call it a National Department of Risk. Bottom line: Presumably, someone will be watching out for those now-ubiquitous “systemic risks.”

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Comments

[biabouman41]

These are minimum reforms and some defenders of laissez faire capitalism are already saying too much. This is minimum. More needs to be done. For example, if a company is too big to fail regulators should promptly break it up. Otherwise we, the tax paying public will be responsible to bail them out. Also, I understand that banks will be required to carry only 5% of loans they originate on their books. That needs to be much higher 10-15%.
Wall St. is apparently very happy that the reforms were minimal. They have been sliding for the previous 3 days but now they make an upswing. I think that they have concluded that they can keep ripping off the public.
I certainly wish these reforms had more bite.

[PhilipTaylor]

Wall Street is the CENTRAL BANK = FED!

Wall Street Owns with a London, German, and Swiss Banks the FED! 67%!

OLIGARCHY Must END! END THE FED!

[PhilipTaylor]

Why does this NOT DO AWAY with the ENRON LOOPHOLE, that allows Banks to hold whatever they want "OFF-THE-BOOKS" and invisible to Auditors? Big Banks have same scam as FED!

----------­----Always been illegal accounting until ENRON, Arthur Anderson, and Congress approved it!

Why has this NOT re-introduced "MARK-TO-MARKET" for "ON-THE-BOOKS" accounting!

----------­----Otherw­ise, NO ONE KNOWS what Bank Assets are really worth!

[kevsters]

This stimulus package and economic reform debate is pointless when you have corporate shills blaming unions for everything.

Watch this clip of Jim Kramer saying that the reason why the stimulus package has not created many jobs is because the money was given to local unions. WHAT???

http://progressnotcongress.org/?p=1840

[Furby]

It's time for America to hit the streets in protest. Take a page from Iran's uprising. The fat cats aren't going to budge until you scare them.

[nellie]

And what's your policy proposal?

[Eriq]

Hey, nellie, what's with your smart-aleck question, huh??
It's the job of the ELECTED OFFICIALS to come up with decent proposals and OUR duty to approve or disapprove. That's why those fat-cat politicians are bringing down the dough.
Why is it you cannot grasp the very simple and easy-to-understand American system?

[Furby]

Like I said, time to hit the streets and kick all that dead wood right outta there.

[Eriq]

100% agreed!! American should have hit the streets when George W. Bush STOLE the election in 2000.

[mattyd123]

Joke. Fed brings down economy. Obama gives them more control.

[nomorefed]

Take back the trillions of $$$ given to the banks, who just sit on it and make it totally ineffective then start government incentive to create realistic industries that give employment and generate real productive income, some of which would hopefully be from exports.

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.

recommended reading: http://www.bit.ly/12NCJR

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.

[fifty8]

The Fed is monetizing about $2.3 trillion in Treasuries, Agencies and CDOs. We said week’s ago that these monetizations would be followed by an additional $2 trillion if not by the end of this year, by March 2010. The Fed has no other choice. This is going to go on indefinitely until the dollar reaches 40 on the USDX and at that point no one will want to buy dollar denominated securities or to even borrow dollars. That is when we’ll have our next Bretton Woods type conference where all currencies will devalue and default and gold and silver will reach great heights. We saw all this coming when we warned you earlier in the year that you had until June to refinance debt. We hope you did so. We are now entering a new stage in real estate. Price pressure is going to press a further downward bias that will last a minimum of 3-1/2 years. How long we will be on the bottom no one knows.

http://www.marketoracle.co.uk/Article11403.html

[jdbco]

If you are interested in the Financial Crisis and the global economy there is a useful project http://www.crisisobserver.com/, a daily scan of important and interesting stories from around the world

[funkalicious]

America should be concerned with the push to move this reform quickly.

They wrote the bailout in a slapdash manner and look what that wrought.
Out right theft of taxpayer money, a direct transfer of wealth from the middle class taxpayer to the top 1%
via bank dividend and bonus payments and prop up deals for financial entities like Goldman Sachs via
Aig counter party derivative payouts.

They socialized the losses and privatized the profits.

Do we really want another bill that holds such grave importance to our freedom and longterm economic health given the bums rush through congress?

[1dogs2]

Who's "they"? As I recall, TARP was rushed through Congress last fall when the Bush administration called in legislators and told them that failure to act immediately would result in a world-wide economic meltdown. There is some evidence that that was an accurate prediction. There was little time for thoughtful discussion and second thoughts.

Regulatory and health care reform, on the other hand, have been the subject of serious thought, debate and consideration for years. The regulatory reform proposed yesterday was thoroughly discussed with all affected interest groups and represents as strong a medicine as has a chance of passing. It is designed to ensure that there is no repeat of the irresponsible conduct of Wall Street that led to the near catastrophic failure of the markets. Until it passes, there is nothing to prevent the now recovering megabanks and hedge fund gamblers from repeating that conduct.

How much time do you think is sufficient for consideration of these measures? A couple of weeks would suit me.

[Villagesviewpoint]

And the Wall Street Journal runs a story saying America has concerns about the plans to restructure Wall Street and the rest of the financial industry.

Or is it that Rupert Murdoch and his well connected right wing freinds have concerns. Could a major media giant like him, attempt to make the news?

I say regulate the crap out of these bums, and make sure that everyones investments are safe, and when they find a conflict, they investigate it to the limits, and litigate to the same extreme.

By the way, has anyone been indicted over the whole melt down problem which reared it's ugly head, in September? You know the ones responsible for allowing the "SWAPS" to ruin the Worlds financial systems.

[1dogs2]

Paul Krugman, who has been a severe critic of the administration's economic policies thus far, is pretty well satisfied with these regulatory measures, which gives me some confidence in them. Now the regulated interests will send out their army of lobbyists and try to gut the bill. FIGHT BACK! Call your representatives in Congress.

[Lyr]

Why does anyone listen to Krugman? He called for the housing bubble to be created, he pressed for then cheered the Fed slashing interest rates to historically low and stupid levels. Krugman called for this catastrophe.

"In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer."

You can find more reckless commentary from Krugman here http://blog.mises.org/archives/010153.asp

[Dredd]

The banking industry led the way for NASA or vice versa.

http://blogdredd.blogspot.com/2009/06/backwards-to-future-moon.html

[furey]

http://michaelfury.wordpress.com/2008/08/20/the-ghost-in-the-machines-the-mystery-of-the-wtc-hard-drive-recoveries/

[grace14]

Do not need to know any more about banks and their games they play and not honest brokers.....banks ran out of money hello? Bush got the tarp money before he left to fill up the banks again with our money....Had 5 months from Sept to Jan 20th before leaving office did nothing nothing.....even did nothing but auto GM and left for Pres Obama Cheney himself said that......but want miracles with Pres Obama in what less then 3 months all were screaming and he did not have a full cabinet yet and handed 12 crises all over in America......what Paulson did not know how to read quarterly reports in teh last 8 years or graphs of lost jobs lost industries etc?

[Name Not In Use]

Mr. President,

The solution is painfully obvious.

PUT ELIOT SPITZER IN CHARGE OF THIS OVERSIGHT COUNCIL!

Then just stand back and watch the smoke.

Problem solved.

[Dustee]

LOL, I hadn't thought about him. Good idea!

[grace14]

Like it was in the old "honest days of banking".. If someone cannot afford their loan their requesting, they cannot get the loan period. If bank loan and willing knowing a customer cannot afford it...banks losts also....That is how banks were in the old days...a honest broker....in the old days also, who ever loaned money from a bank to a customer and they fault to be able to make payments, also lost their job at the bank..credibility ...honesty...

[Bruins97]

Brokers were never honest they just stole 10 cents instead of the whole dollar back in the day when they traded you into oblivion and the problem is not really whether people can afford the loans its that they could barely afford them and then were wiped out once the adjustables went up or other terms kick in........­..........­.

This goes on in lots of sectors of the financial industry.....look up Variable Universal Life Insurance.­...insuran­ce brokers sold tons of high premium insurance telling people not to worry about the premium cost because the amount of premiums you pay will be decreased as the investments in the insurance grow.....the investments lost money and the people got whacked for high premiums or lost their insurance.....These policies do work in the right situation but the incentive by the company to the broker is to use them innapropriately to get the most commissions......

Its the same concept....sell a time bomb with flawed underlying data (not enough reserves or income to cover a mortgage rate increase or underfund a policy that will later result in higher premiums) get the higher commissions and be gone before it explodes. Then the company says the broker was at fault and he was fired and they create the next time bomb. Everyone gets bonused out and the management changes from company to company doing the same thing with no new results........like a giant ponzi scheme.