June 18, 2009

The Obama administration on Wednesday proposed the most sweeping overhaul of the financial system since the 1930s, a far-reaching regulatory revamp that promises to bolster consumer protections and guard against the sort of systemic risks that nearly crashed the economy last fall.The banking industry, however, fears the plan will heap onerous restrictions onto financial institutions, boost costs for consumers and the sector, and stifle innovation.

The Treasury Department released an 88-page wish list of changes, many of which will require the approval of Congress, aimed at plugging the gaps in supervision that allowed credit to flow to those who couldn't afford it and planted ticking time bombs throughout the economy.The plan would grant broad new powers to the Federal Reserve to supervise institutions considered too big to fail.