Overseeing Banks: Who Does It?

With the economy slowly limping back towards the positive, government action is starting to take place. Pushed along by President Obama, Congress finally has banking regulation bills on the floor. Though the House has already passed a primary bill, debate in the Senate continues over who should be in charge of overseeing the banking industry. Their are currently two choices, the Fed (Federal Reserve Bank), and the Treasury Department. Neither party has solidified which side it supports with both Democrats and Republicans supporting each "candidate."

The House bill provides for continued Fed power, however it is likely the the Senate decision will strip the Fed of some of its responsibilities, bequeathing them to the Treasury Department. The most important is financial regulation. Mr. Bernanke (head of the Reserve) said earlier this month that he would support a Treasury-lead council, however only in regards to risk management.

Whether or not the Fed should lose control of some regulation is still up for debate. What is clear, is that Congress will soon pass a bill creating a committee to watch over financial institutions in an effort to prevent another economic collapse. Hopefully this committee will mark a meeting of the Fed and the Treasury, and that a coalition of these agencies will promote a more watchful guardian over the big national banks.