US Treasury Defends Recent Bank Reforms

After the recent announcement regarding the changes to the US financial regulatory system, the US treasury faced a number of criticisms from Wall St, and Congress.  Recently, Timothy Geithner announced his intentions to try and put the changes through congress as quickly as possible in order to “pursue these essential reforms”.

At this moment in time, there still remains a great deal of uncertainty about the full details of these reforms, other than the fact they are going to most likely be wide-ranging and radical.  Political analysts agree that successfully passing these changes through congress will not happen without significant lobbying.

The US Treasury aim to take advantage of the financial crisis by bringing about these changes, but the senate banking committee have argued that giving the additional types of powers to the federal reserve as expressed in the reforms is unwise considering their reputation and the current lack of confidence given their current track record in dealing with the financial crisis.

Timothy Geithner went some way to defending the reforms which see a new consumer agency being formed alongside an oversight council, which aims to both protect consumer interests and improve the state of regulation. There is still a great deal of speculation on what aspects of the plan will successfully pass through the senate due to the implied costs and also the issues with the Federal Reserve.

Dispute what the Senate Banking Committee has warned, Geithner looks set to try and force these changes through congress as soon as possible.  This may be a premature move by the new Treasury chief, and it only fuels criticism about the way the new US government has handled the current financial crisis.

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