Geithner Pitches Overhaul of Financial Oversight

Tim Geithner today proposed a major expansion of federal regulatory powers, reports the Washington Post. In testimony before Congress, the Treasury chief called for hedge funds, derivatives markets, private equity firms, and major insurers like AIG to be brought under strict federal supervision for the first time. His plan, which requires congressional approval, would reverse decades of deregulation.

The revamp seeks to rein in the unchecked risk-taking blamed for the current crisis and will give regulators the power to seize any troubled firm big enough to put the financial system in peril. Administration insiders say Geithner is keen to get the regulatory overhaul through Congress as soon as possible while public anger over Wall Street's blunders is still riding high.
(More bank regulation stories.)