As usual with this administration, there is a good deal less on the table than one might hope to find. The initial approach, which was to bring all the relevant lobbyists together and let them slug it out, seemed like it might have been a good idea. There were many competing interests, and reason to hope they might neutralize one another. The administration could claim it had "listened," and then go on to do what really was needed.
Ooops, pardon me! For a second there, I forgot it was the Obama administration, which works from the first principle, "It is a far, far better thing to look like you're doing something than actually to do something. Getting things done just gets people pissed off."
Making the Fed regulator in chief is Obamanomics 101:
- The Fed is an "independent" agency. Hence, if it screws up, the administration can duck all blame -- especially while Bush appointee Ben Bernanke is in charge.
- The Fed is a creature of Wall Street, so no matter how much the financial industry may whine about oppressive regulation, you can bet they're not especially upset.
- Larry Summers would love to be the next Fed chairman, and he'd love it even more if the job included additional autocratic powers.
Meanwhile, in Switzerland...
According to Carter Dougherty, in the New York Times, "Swiss financial regulators said Thursday that they were considering assuming new emergency powers that would allow them to break up large banks to wind down troubled business units that are not essential to the economy." After their UBS and Credit Suisse problems, the Swiss have decided that they've had enough of banks that are 'too big to fail.'"
They'll start by "working with" the banks -- but it sounds like, in the absence of real cooperation, they'll just go ahead and do it. Yay, Switzerland!