The "transformative" changes Henry Paulson has in mind for the regulation of the US economy will take years to implement, the Treasury Secretary said today. The plan would greatly increase the Fed's oversight powers, regulate the insurance industry for the first time, and add federal oversight of the mortgage business, the Wall Street Journal reports. “We need to begin the serious work of modernizing and reforming the structure,” Paulson said.
The plan gives vast, and vague, powers to the Fed, putting investment banks under its purview for the first time. The Fed “would have the authority to go wherever in the system it thinks it needs to go for a deeper look to preserve stability,” Paulson said. The plan would also merge several agencies to consolidate market oversight. (Read more Henry Paulson stories.)