Blueprint for a Modernized Financial Regulatory Structure Information
March 31, 2008
Dear SIFMA-CL Member:
Please see below from Tim Ryan, CEO of SIFMA, on the Treasury Department’s “Blueprint for a modernized Financial Regulatory Structure” released today.
Below you will find:
SIFMA’s summary of the plan’s executive summary
A link to Treasury’s fact sheet on the plan
A link to the plan’s executive summary
A link to the Blueprint
A link to Secretary Paulson’s speech text
SIFMA’s public reaction from Friday evening to the expected unveiling of a plan
Contact information for SIFMA
SIFMA’s summary of the Blueprint’s executive summary
Last March, Treasury convened a blue-ribbon discussion of capital markets competitiveness. Industry leaders and policymakers alike agreed that the competitiveness of our financial services sector – and its ability to support U.S. economic growth – are constrained by an outdated financial regulatory framework.
The current regulatory framework for financial institutions is based on a structure that has been largely knit together over the past 75 years. There are now:
Five federal depository institution regulators in addition to state-based supervision.
One federal securities regulator and one federal futures regulator, with additional state-based supervision and self-regulatory organizations with broad regulatory powers.
Insurance regulation is almost wholly state-based, with 50+ regulators. This structure raises a number of issues with an international dimension that can be inefficient and costly.
This structure is antiquated and struggling to keep pace with market developments.
The optimal regulatory structure needs to attract capital based on its effectiveness in promoting innovation, managing system-wide risks, and fostering consumer and investor confidence.
In this report, Treasury presents a series of short, intermediate and long-term recommendations for reform of the U.S. regulatory structure.
The short-term recommendations present actionable changes to improve regulatory coordination and oversight immediately, including:
Modernize the President’s Working Group (PWG).
Create a new federal commission for mortgage origination to evaluate, rate, and report on the adequacy of each state’s system for licensing and regulation of participants in the mortgage origination process.
Clarify liquidity provisioning by the Federal Reserve to give the Federal Reserve the information it needs during this temporary period. The PWG will study the issue further.
The intermediate recommendations focus on eliminating some of the duplication of a functional regulatory system, but more importantly try to modernize the regulatory structure for certain financial services sectors within the current framework.
Treasury also includes a long-term model for discussion. This model holistically addresses the inadequacies of the current functional regulatory system.
Friday night SIFMA was asked for its reaction to the expected unveiling of the plan. SIFMA was widely quoted as saying, “Treasury has delivered a thoughtful and sweeping plan which should provoke intense discussion, debate and potential legislative changes. Our present regulatory framework was born of Depression era events and is not well suited for today's environment where billions of dollars race across the globe with the click of a mouse. That fact, teamed with the current market conditions, result in an universal agreement that it is time to modernize and revitalize the current system. Treasury’s three step approach is very wise because it allows time for serious analysis, discussion and important choices. SIFMA, which represents global financial markets participants, intends to be an important player in this multi-year process.”
•
del.icio.us
digg
facebook