This editorial appeared in The Kansas City Star.
When it comes to regulating banks, the U.S. government has spent years setting up a system that gets it right most of the time. Strict reporting is required of the banks. And regulators are prepared to swoop in when the public’s deposits are in jeopardy.
Now, the Obama administration wants Congress to move quickly on a sweeping expansion of federal regulation over the financial system. But while the struggling system obviously needs more oversight, a rush-job is not recommended.
This would mark the biggest expansion of financial regulatory authority since the Great Depression. The risk of unintended consequences is high enough without hasty action.
The administration's plan would, for the first time, authorize needed federal regulation of financial derivatives, as well as hedge funds and large insurance companies such as American International Group.
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