US financial system overhaul plan is too little, too late: Hillary

April 1st, 2008 - 10:36 am ICT by admin  

By Arun Kumar
Washington, April 1 (IANS) Democratic presidential hopeful Hillary Rodham Clinton has joined the critics of an ambitious Bush administration plan to overhaul the regulatory apparatus that oversees America’s financial system, saying the proposal “comes late and falls short.” The government must move more assertively to contain the mortgage and credit crisis rattling financial markets, especially in finding ways to ease soaring rates of home foreclosures, the former first lady said at a campaign appearance Monday.

“No amount of rearranging the deck chairs can hide the fact that our housing and credit markets are in crisis, and they’re sinking deeper every day,” said Clinton who has focused on America’s economic woes in appearances in Pennsylvania and other states holding primaries in coming weeks.

“Every day we fail to take aggressive action is a day lost,” said Clinton hammering home the message that she is better prepared to tackle economic challenges than Democratic rival Barack Obama and presumptive Republican nominee John McCain.

The Bush administration plan announced Monday by Treasury Secretary Henry Paulson proposes to give the US central bank, Federal Reserve more oversight of the country’s financial regulatory system and to merge regulatory agencies with overlapping jurisdictions.

The proposal also would create a new commission to set minimum licensing standards for mortgage brokers and move toward federal regulation of the insurance industry.

“Some may view these recommendations as a response to the circumstances of the day,” Paulson said. “That is not how they are intended.”

Several senior lawmakers, while praising the administration for raising important issues for discussion, said the odds were long for a major overhaul in the remaining days of the Congressional session before the general election in November.

House Speaker Nancy Pelosi called the proposal a “step in the right direction”. But in a statement, she said: “We need to go further. We must take steps now to provide help to families who are hurting.”

Senator Christopher J. Dodd, Democratic chairman of the Senate Banking Committee said: “Since this is opening day in baseball, I might as well make a baseball metaphor. This is a wild pitch. It is not even close to the strike zone.”

Dodd and Senate majority leader Harry Reid said in a telephone conference call that overhauling the regulatory structure was not a priority. Instead, they said, they were hoping to quickly move legislation that would help homeowners facing higher mortgage rates and foreclosure.

Democratic Representative Barney Frank, chairman of the House Financial Services Committee, called Paulson’s plan a “constructive step forward” but said the Federal Reserve needs even more authority.

Democratic Senator Charles Schumer calling the blueprint “a good foundation for updating the regulation of US financial markets,” but questioned Paulson’s statement that the regulatory framework is not to fault for the current economic unrest.

Paulson’s 218-page blueprint would give the Federal Reserve more authority to oversee the markets and would create one super agency to oversee both investor protection and market stability, assuming many of the tasks of current agencies, such as the Securities and Exchange Commission and the Office of Thrift Supervision.

Conceding that many of the changes would have to await debate in the next Congress and the next administration, Paulson said that nothing in the long-range planning would prompt the Bush White House to veer from its focus on the current economic downturn.

“Our first and most urgent priority is working through this capital market turmoil and housing downturn, and that will be our priority until this situation is resolved,” he said. “With a few exceptions, the recommendations in this blueprint should not and will not be implemented until after the present market difficulties are past.”

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