Senator Pushes Plan Overseeing Banks

Currently, the Federal Reserve is the system-wide overseer of banks, and Senator Dodd of Connecticut (also the head of Senate Banking Committee), presented a plan that’s different from what President Obama envisions.

“Clearly, we need to put architecture in place that restores confidence to the people. It should make them feel engaged in the financial activities, from investing in stock to buying insurance or depositing in the bank, they should have confidence in our system,” says Mr. Dodd in an interview. The plan is intended to be Senate’s starting point in respond to market crisis as it redraws financial landscape. “But I don’t want business to be strangled on the other side,” he added.

The proposal is to merge four bank agencies into one and have a so-called “super regulator.” For markets, banks, and consumers, the bill of Mr. Dodd is expected to have the same central role for debate similar to the recent bill of Senator Max Baucus in remaking the system of health care.

Aides and lawmakers are saying that Mr. Dodd’s bill is coming public shortly, and it would be more politically risky and ambitious compared to the plan coming from the White House. President Obama considered, but then has decided against the combination of four banking agencies – Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, and Federal Reserve – into one superagency.