Wednesday, June 17, 2009

Obama puts in strong new regulations of the finical industry

President Obama just got his Warren G on and has announced plans for a number of new regulations on the finical system.

formerly unregulated fields such as hedge funds, venture capital funds, credit default swaps and private equity funds will no be regulated by the fed.

there will be a consumer protection agency that will deal with regulating the consumer credit industry and hopefully will cut down on lending abuse many people have gone through.

the plan will close down the Office of Thrift Supervision.

The Federal Reserve of finical companies that are so large that if they go under they could take the economy down with them (the ones they called to big to fail)

the plan will also put a check on the Federal Reserve by putting a rule in place that if the feds want to infuse any bail out capital to a finical company they have to get the OK from the Treasury Department.

also banks will have higher capital requirements.

and that just part of it. But as stated this is jut Obama's plan, there surely will be some changes once to gets voted on by congress but this is a big change to the ways have been done since Reagan was in office. It a shift form deregulation to putting some more rules back in place and I honestly have to say that this may be a good ideal. Even thought I think there should be some market freedom, the push for deregulation has gone a bit over board, we need rules or we could in end in market chaos.

The S&P has down graded banks ratings once the news of this plan was released.

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