Paper
So Much for That Plan”More than 70% of commercial bank assets are held by organizations that are supervised by at least two federal agencies; almost half attract the attention of three or four. Banks devote on average about 14% of their non-interest expense to complying with rules” (Anonymous 88). A fool can see that government waste has struck again. This tangled mess of regulation, among other things, increases costs and diffuses accountability for policy actions gone awry. The most effective remedy to correct this problem would be to consolidate most of the supervisory responsibilities of the regulatory agencies into one agency. This would reduce costs to both the government and the banks, and would allow the parts of the agencies not consolidated to concentrate on their primary tasks. One such plan was introduced by Treasury Secretary Lloyd Bentsen in March of 1994. The plan called for folding, into a new independent federal agency (called the Banking Commission), the regulatory portions of the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS). This plan would save the government $150 to $200 million a year. This would also allow the FDIC to concentrate on deposit insurance and the Fed to concentrate on monetary policy (Anonymous 88). Of course this is Washington, not The Land of Oz, so everyone can’t be satisfied with this plan. Fed Chairman Alan Greenspan and FDIC Chairman Ricki R. Tigert have been vocal opponents of the plan. Greenspan has four major complaints about the plan. First, divorced from the banks, the Fed would find it harder to forestall and deal with financial crises. Second, monetary policy would suffer because the Fed would have less access to review the banks. Thirdly, a supervisor with no macroeconomic concerns might be too inclined to discourage banks from taking risks, slowing the economy down. Lastly, creating a single regulator would do away with important checks and balances, in the process damaging state bank regulation (Anonymous 88). To answer these criticisms it is necessary to make clear what the Fed’s job is. The Fed has three main responsibilities: to ensure financial stability, to implement monetary policy, and to oversee a smoothly functioning payments system (delivering checks and transferring funds) (Syron 3). The responsibilities of the Fed are linked to the banking system. For the Fed to carry out its job it must have detailed knowledge of the working of banks and financial markets. Central banks know from the experience of financial crises that regulatory and monetary policy directly influence each other. For example, a banking crises can disturb monetary policy, discouraging lending and destroying consumer confidence, they can also disrupt the ability to make or receive payments by check or to transfer funds. It is for these reasons that it is argued that the Fed must maintain a regulatory role with banks. The Treasury plan would leave the Fed some access to the review of banks. The Fed, which lends through its discount window and operates an interbank money transfer system, would have full access to bank examination data. Because regulatory policy affects monetary policy and systemic risk, it is necessary that the Fed have at least some jurisdiction. The Fed must be able to effectively deal with current policy concerns. The Banking Commission would be mainly concerned with the safety and stability of the banks. This would encourage conservative regulations, and could inhibit economic growth. The Fed clearly has a hands on knowledge of the banking system. “The common indicators of monetary policy – the monetary aggregates, the federal funds rate, and the growth of loans – are all influenced by bank behavior and bank regulation. Understanding changes and taking action in a timely fashion can be achieved only by maintaining contact with examiners who are directly monitoring banks” (Syron 7). The banking system is what ultimately determines monetary policy. It is only common sense to have personnel in the Fed that have a better understanding of the system other than just through financial statements
and examination reports. The Fed also needs the authority to change bank behavior that is inconsistent with its established monetary policy and with financial stability. This requires both the responsibility for writing the regulations and the responsibility for enforcing those regulations through bank supervision. State banking charters have already started to be affected. Under the proposed plan, state chartered banks would be subject to two regulators. While the federal bank would have only one. Thus, making the state bank charter less attractive. However, an increasing number of banks are opting for state supervision. It turns out that many banks are afraid of losing existing freedoms, or of failing to gain new ones, if supervision is centralized. “State regulators have given their banks more freedom than federal ones: 17 now permit banks to sell insurance (and five to underwrite it, 23 allow them to operate discount stockbrokers and a handful even let them run estate agencies” (Anonymous 91). The FDIC has two main criticisms of the Treasury’s plan. First, FDIC Chairman Tigert believes “that it is very important that there be checks and balances in the system going forward” (Cocheo 43). Second, Tigert believes that, since the FDIC is the one who writes the checks for bank failures, the FDIC should be allowed to keep its independence. It is necessary to maintain the checks and balances of different agencies. This separation is necessary because of the differences in examinations of the different regulatory agencies with respect to the same institutions. It is important “that the independent [deposit] insurer have access to information that’s available not only through reporting requirements, but also through on-site examinations” (Cocheo 43). Tigert explains that the FDIC must keep backup examination authority. As well as maintain the ability to conduct on-site examinations of all institutions it insures, not just the state-chartered nonmember banks it supervises directly. “She agrees with those who say there is no need for duplicative examinations, but insists FDIC must be able to look at institutions whose condition or activities have changed drastically enough to be of concern to the insurer. While consolidation of the bank supervisory process is overdue, issues of bank supervision and regulation affect the entire economy. There is no way to tell what is in store for banking regulation in the future. It is known, however, that we must beware that all the regulatory agencies in place now, are in place for a reason. Careful thought and debate must be undertaken before any reform is made. In the end, Americans seem no more inclined to tolerate concentration among regulators than they are among banks.
Anonymous. “American Bank Regulation: Four Into One Can Go.” The Economist 330 (March 5, 1994): 88-91. Cocheo, Steve. “Declaration of Independence.” ABA Banking Journal 87 (February 1995): 43-48.Syron, Richard F. “The Fed Must Continue to Supervise Banks.” New England Economic Review(January/February 1994): 3-8. Works ConsultedAnonymous. “Banking Bill Spells Regulatory Relief.” Savings & Community Banker 3 (September 1994): 8-9. Broaddus, J. Alfred Jr. “Choices in Banking Policy.” Economic Quarterly (Federal Reserve Bank of Richmond) 80 (Spring 1994): 1-9. Reinicke, Wolfgang H. “Consolidation of Federal Bank Regulation?” Challenge 37 (May/June 1994): 23-29.
Другие работы по теме:
Lord Durham Letter Essay Research Paper Dear
Lord Durham, Letter Essay, Research Paper Dear The York Sun, Hi my name is Andrew Archerbald. I am a thirty five year old banker and have been doing my job for ten years. I am married
Ecclesiates 318 Essay Research Paper Interpretation of
Ecclesiates 3:1-8 Essay, Research Paper Interpretation of Ecclesiastes 3:1-8 The Bible verses Ecclesiastes 3:1-8 are Solomon?s words as he is telling of the relationship that we may have with God and of His master plan. We are to understand God?s impeccable timing, absolute control, magnificent grace, and eternal glory.
Abortion Essay Research Paper A Plan for
Abortion Essay, Research Paper A Plan for a Homework Center The school board came up with an idea of making the school day two periods to give students time to do homework in a homework center. The idea of extending two classes is a good one. There are a lot advantages and disadvantages.
Private Pension Plan Essay Research Paper Private
Private Pension Plan Essay, Research Paper Private Pension System The Current Social Security system should be replaced by a mandatory Private Pension plan. There are different types of investment plans one could choose before or even after they retire. Social Security is what everyone depends on once they retire at 65.
Social Control Theory Essay Research Paper The
Social Control Theory Essay, Research Paper The article “Arizona wants special prison for foreiners” is one example of how ethnicity and crime are an issue and how some feel it should be delt with. As some may see this as a positive thing to do inorder to help the process of deportation or what ever the consequences may be, many others are calling it a plan that would segregate Mexican inmates, being that 89 percent of the foreign inmates would fall under that race.
Genes Essay Research Paper Genes are the
Genes Essay, Research Paper Genes are the smallest units of heredity. The information from all the genes, taken together, makes up the blueprint or plan for the human body and its functions. A gene is a short segment of DNA which is interpreted by the body as a plan or template for building a specific protein.
Good Paper Essay Research Paper Theseus and
Good Paper Essay, Research Paper Theseus and Heracles were very similar characters in mythology. In this paper I plan to point out these similarities, and also tell what is different between them. First of all, Theseus and Heracles were both well know for their strength and hero-like attitudes. They were well known for helping people, or places, out from certain evils such as Theseus killing the Minotaur so that the tributes to it would cease.
Great Compromise Essay Research Paper After arriving
Great Compromise Essay, Research Paper After arriving at Philadelphia the representatives from the thirteen colonies decided to scrap the old Articles of the Confederation, even with explicit instructions form Congress to only adjust. Many ideas were tossed around including the plan by the heavily populated colony of Virginia, which was called “the large-state plan”.
Bush Tax Proposal Essay Research Paper IPI
Bush Tax Proposal Essay, Research Paper IPI adresses the tax cut proposal that President Bush is presenting before Congress. IPI feels that althouh Al Gore had a good plan for the national tax cut by decreasing the national income tax, George Bush’s proposal was much better because it not only lowers income tax, but also eliminates estate and death tax (accounting for almost 66% of the 1,437.8 billion dollar cut).
Lesson Plan Essay Research Paper Lesson Plan
Lesson Plan Essay, Research Paper Lesson Plan: Reading Grade Level:Fourth Grade Aim:To recall the sequence of events in a story, using a story pie. Behavioral Objective:Students recall the sequence of events in a story, using a story pie, with 80% accuracy.
The Copernican Plan Essay Research Paper These
The Copernican Plan Essay, Research Paper These days public school districts seem to be under attack for their quantity not quality education standards. These school districts face big problems in attempting to deliver quality education to their customers, the students. How can a school district enhance the quality of time that students spend in the classroom, provide more time for collaboration and coordination among it’s professional staff members, promote continuous professional development, and do so with as few dollars as possible?
Macbeth Essay Research Paper Macbeth EssayFrom the
Macbeth Essay, Research Paper Macbeth Essay From the very beginning Macbeth has been a victim of the witches? prophecy and Lady Macbeth?s ambition. With no support he soon succumbed to the pressures of each.
The Importance Of Budgeting And Long Range
Financial Goals Essay, Research Paper The Importance of Budgeting and Long Range Financial Goals Me, being a financial independent have experienced first hand how important it is to keep a financial plan. Using a financial plan I have elevated my savings abilities a long way. Knowing where each dollar is being spent helps the spender to manage each dollar in an uplifting way.
Treatment Of The Prisoners In The Concentration
Camps Essay, Research Paper Interdisciplinary Research Research Proposal The Treatment of the Prisoners in the Concentration Camps The topic that I plan to focus on in my research paper is treatment inside different concentration camps during the Holocaust. I plan to focus on three different camps, but I have not narrowed down my choices yet.
The New Plan To Eat Healty Essay
, Research Paper The New Plan to eat Healthy Now in days, we are too busy with work that sometimes we don’t have time to eat. According to a 1997 study this increases your stress level. This doesn’t has to happen! Dr..
Cash Balance Essay Research Paper Cash Balance
Cash Balance Essay, Research Paper Cash Balance Pension Plan In corporate America, the majority of workers have been introduced to pension plans. A pension plan can be defined as a payment, not wages, made regularly to a person (or family) who has fulfilled certain conditions of service and reached a certain age.
Abortion Essay Research Paper AbortionI feel that
Abortion Essay, Research Paper Abortion I feel that abortion is wrong. God says that he is the way, the truth, and the life. I am a Christian and I believe that God has a plan for everyone and everything. He has the whole world planned and He sees ahead. What happens is his will, no matter how harsh it may be or difficult to deal with.
Medea Essay Research Paper Medea
Medea Essay, Research Paper Medea’s plan is to kill Jason’s new bride and his two children she had bore for him and then flee for Athens. The chorus tries to console Medea and tell her not to do such horrid things to other people particularly her children. Medea ignores their request and is stuck with the decision of whether or not to kill her children.
Romeo And Juliet Fate Essay Research Paper 2
Romeo And Juliet: Fate? Essay, Research Paper Romeo and Juliet: Fate? Why was Romeo`s love for Juliet terminated. Fate or not? Well they met at the royal ball of the montigues until Romeo noticed Juliet. Finally they kissed and
Social Security Essay Research Paper Social securityThe
Social Security Essay, Research Paper Social security The issue I am addressing today is what to do about social security. There is going to be a large problem with our social security in years to come. Both Al Gore and Bush
Religious Edu Essay Research Paper Teacher
Religious Edu Essay, Research Paper Teacher: Raymen E. Grade Level: 6th Date: 08/26/00 Lesson Plan Book One ? Exploring and Discovering. Topic One ? Mapping the world.
Buying Plan For Pro Shop Essay Research
Paper Summary of Buying Plan To determine how much money I have spent on merchandise I need to use a buying plan. A buying plan is essential to my golf shop so I know how much money I
Denmark Vessy Revolt Essay Research Paper Denmark
Denmark Vessy Revolt Essay, Research Paper Denmark, Vessy, Revolt 1. Question: How to Denmark come to this country and why was he free? Denmark came from Africa and was a slave on a ship. He played a role as a cabin boy and soon became a rower. After that he won a lottery of $1500 in the town of Charleston. What he did with his money was ask his master if he could buy his freedom.
IMPROVING DOCUMENT PRODUCTIVITY Essay Research Paper IMPROVING
IMPROVING DOCUMENT PRODUCTIVITY Essay, Research Paper IMPROVING DOCUMENT PRODUCTIVITY My plan for improving my productivity in producing documents is to focus on time management and on work organization. If you can improve both of these factors, my overall productivity will be significantly higher.
401K Essay Research Paper 401K the retirement
401K Essay, Research Paper 401K, the retirement savings plan turned 20 this month. It has become the centerpiece retirement vehicle for millions of employees since it was kicked off on January 1, 1981.
Constitutional Convention Essay Research Paper The Constitutional
Constitutional Convention Essay, Research Paper The Constitutional Convention Our country was based upon the idea that every citizen has certain rights that can not be taken away from him/her; these inalienable rights form the backbone for our democracy. Our constitution, which secures our rights and how we are governed, was not an easy task to write.
Settlement Patterns Essay Research Paper Settlement PatternsThere
Settlement Patterns Essay, Research Paper Settlement Patterns There are three main models for planning a city: The Burgess plan which viewed the city as a series of concentric zones, with the CBD as the single centre surrounded by a series of functional zones to produce a pattern of concentric circles – the CBD being the centre surrounded by a zone of transition, surrounded by workers houses, then by the zone of better residences, and the commuters zone.
Blah Essay Research Paper For my senior
Blah Essay, Research Paper For my senior thesis, I will be conducting further research on my project, and the idea from which my project came. This research will include different experimental approaches and setups, the outcomes of these new schematics, and the way in which the project was originally approached.
Volcanoes Essay Research Paper My Report is
Volcanoes Essay, Research Paper My Report is on Volcanoes. For a starter, I have a lay out of the plan for my report. Also I would like to follow a volcano in it’s path. Right now here is part of my report.
Med Marijuana Essay Research Paper Medical Marijuana
Med. Marijuana Essay, Research Paper Medical Marijuana The U.S. Supreme Court may turn Nevada s plan to have sick patients use marijuana into a ruling Monday. They provided no legal leeway for medicinal use of the drug. Assemblywoman Chris Giunchigliani, a Democrat from Las Vegas, who sponsored Nevada s medical marijuana bill, said that the ruling doesn t affect the current plan before the Legislature that would allow patients to join a state medical registry and grow up to seven plants for personal use.
Budget Essay Research Paper THE BUDGETTo pass
Budget Essay, Research Paper THE BUDGET To pass a budget deal takes a lot of time and work. There are many factors involved in this long process. The President first has to propose a plan to balance the budget. He has to look at the Federal deficit and talk with Congress. Congress then will negotiate or compromise a plan of their own with the President.