A number of ideas are circulating throughout Congress and the Obama administration as pertain to the consolidation of the bank regulation sector, including one idea that would create a single regulatory entity to police all activity, according to Reuters. The various ideas, supported by those who oppose the practice of “regulator shopping,” in which a financial entity appeals to the regulator who will apply the rules the most leniently, have inspired debate throughout the regulatory community. President Obama has proposed a cut to the number of banking regulators from four to three, combining the Office of Thrift Supervision with the Office of the Comptroller of the Currency, leaving the Federal Reserve and the Federal Deposit Insurance Corp intact. “You eliminate the risk of arbitrage or a race to the bottom,” said one commenter on the reasoning behind consolidation.
Bank Regulation Consolidation Idea Gaining Steam
A consolidation of the banking regulatory sector may be in the offing.
September 9, 2009