Jul 22, 2010

"President Obama's signing of the financial reform bill on Wednesday does not end our intense debates over banking.  Rather, it just moves them to a new sphere. Instead of arguments about legislation in Congress, the next arena is the action (and perhaps inaction) of regulators.

Those pushing for more effective regulation of the financial system are looking for progress in three areas. The first two - raising capital standards and appointing new regulators - are the most discussed, but powerful interests are blocking real change. The third - tougher and smarter Congressional oversight - holds great promise.

First, on key issues such as capital standards there could theoretically be a breakthrough in the so-called Basel process of international negotiations during the run-up to the November summit meeting of the Group of 20 in Seoul. Some senior American administration officials continue to make bullish off-the-record remarks, but Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, sounded a much more cautionary note this week. And European participants continue to emphasize that Germany does not want a significant increase in capital for its banks."

Click to go to The New York Times website and read the entire opinion.