22 June 2009

Well, Here's a Bit of Good Politics in the Financial Overhaul

On the top right, we have the reorganization of the various financial institutions.

Let's zoom in a bit in the right hand side, and we see that Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS)will both be eliminated.

The elimination of the OTS is no surprise, apart perhaps from Greenspan's Federal Reserve, it was the agency most complicit with the bubble.

That being said, the elimination of the OCC is a very good thing. The head of the office was appointed by George W. Bush in 2005, and has a 5 year term, which makes it rather difficult for Obama to get rid of him.

The problem is that the current Comptroller John C. Dugan, has been a roadblock on almost any sort of regulation.

He's successfully gone to the Supreme Court to preempt state regulations, and he has been a major impediment in implementing even the tepid regulations that the Obama administration has proposed.

They are killing the office to get rid of him, and even if the change does not pass, it means that for the foreseeable future, there aren't any banks that will take his instruction without some other agency confirming him.

They just cut Dugan off at the knees, and this action is both wise and well deserved.


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