Paul Weinstein
2008-04-16 07:00:00.0
Current rank: Not ranked

WASHINGTON -

Washington’s oversight of Wall Street if far from ideal. Our system of regulation is a hodgepodge built on a structure dating from the 1930s. There are more than 100 federal, state and self-regulatory (e.g., New York Stock Exchange) agencies that oversee the nation’s commercial banks, insurance firms, investment houses and venture funds. And though some financial institutions, like commercial banks and their holding companies, answer to multiple regulators, others, namely privately held hedge funds, are subject to almost no oversight.

A system rife with holes and redundancy calls for an overhaul. And the recent bailout of Bear Stearns — combined with the housing crisis — may have created a political opportunity for action in Washington. ... The time has come to review whether state regulation of financial firms that operate across state and international boundaries makes sense in today’s global economy. At a minimum, Congress should consider setting national standards for state regulators and allowing a federal charter option for all financial firms. In return for streamlining regulatory duplication, financial firms of all stripes should agree to greater federal oversight, including more frequent and thorough examination, additional resources for regulators, tighter supervision and tougher penalties for those that break the rules….

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