Alphabet Soup of Agencies

A recent op-ed article in the Wall Street Journal by professors from Columbia and Harvard Business Schools provides a view on the political impact on financial regulatory reform in the United States.  Here what they had to say about the missed opportunity in the current proposal by the Obama administration.

For political reasons the administration has decided not to upend the current system. Instead it proposes four federal entities—Financial Services Oversight Council, the Office of National Insurance, the Federal Consumer Coordinating Council, and the Consumer Financial Protection Agency—on top of the current alphabet soup of regulatory agencies. This is a shame. We need fewer, not more, regulators. The Committee on Capital Markets Regulation, a private, nonpartisan organization on which we serve, recommended in its May report that serious consideration should be given to the creation of a unified supervisor, such as a U.S. Financial Services Authority, modeled on the approach of the United Kingdom. Our financial system has had a complete meltdown and our outmoded regulatory structure is partially responsible. This is the time to redesign the system for the future, not for politics as usual.

Reduced complexity and more accountability will result from a streamlined regulatory system.  The professors should take their case to Capitol Hill.