The Dodd plan paradox
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Here’s what I don’t understand about Chris Dodd’s financial reform proposal. On the one hand, he wants to fold the FDIC, the OCC, and the OTS (but not the NCUA, for some reason) into the Federal Reserve — something which makes sense to me.
But on the other hand, he says he wants the Fed to be less powerful, and “would reduce the stature of the Federal Reserve in several ways”.
Is this possible? Or was something lost in translation when the trial balloon was floated over the NYT?
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What easier way to expand deregulation than to put all the regulators in a single boat–and then sink it!
Why would anyone think Dodd’s plan would be otherwise?
Felix:
The article is poorly written, but a close read answers your questions. Dodd is actually proposing the creation of a new, stand-alone banking regulator, which will absorb the current banking functions of the four other agencies. (“The central bank…would lose authority over banks, as well as its ability to regulate mortgages and credit cards.”) He also supports a CFPA and a council-of-regulators to fill the systemic risk role.
You’d think that a proposal to combine three existing agencies and elements of a fourth would have made it into the lede graf in clear and unambiguous terms. Labaton is generally a better writer than this piece suggests; maybe an editor did it to him.
Dodd is angry the fed did not give him a sweetheart deal on his mortgage.
“The main reason I think we should get rid of Chris Dodd is, he represents everything that is wrong with Congress. He is potentially the poster boy for the economic crisis, [and for] the much bigger crisis we’re gonna go through over the next few years if someone doesn’t go to Washington and put a stop to these destructive policies,”
Peter Schiff – 4 Connecticut Senate!