Posts Tagged ‘National Economic Council’

Obama Administration Sets Its Sights on Housing Reform

Tuesday, September 14th, 2010

Obama administration turns to reforming the root of the financial crisis – the housing market.  The Obama administration – fresh from its financial regulation reform legislative victory – is not resting on its laurels.  Next on the busy agenda is reforming the American housing market, which is viewed by many as the root of the financial crisis. In a response to collapsing housing prices and waves of foreclosures, the administration it looking at overhauling the government’s housing policy, although the specifics of the proposed legislation are still under discussion.

The new approach could include bigger downpayments and higher interest rates, as well as more barriers to lower-income people purchasing houses they cannot afford.  The goal is to create a more stable housing market that puts fewer taxpayer dollars on the line and lessens the risk that owners will be unable to pay their mortgages.  Reform also could bring changes to the financial markets as investors are forced to find new investment vehicles if the government removes incentives for putting their money in the mortgage market.  Since the financial crisis began in 2008, the federal government has spent hundreds of billions of dollars to keep housing afloat and assure that borrowers can get loans – and much of that money will never be recovered.  Since the federal government seized Fannie Mae and Freddie Mac, the two mortgage giants and the Federal Housing Administration have more or less been the sole sources of backing for new mortgages for nearly two years.

The Treasury Department’s new Office of Capital Markets and Housing Reform is studying options and has decided that federal policy should highlight “sustainable homeownership” rather than merely growing the rate of ownership.  According to Vincent O’Donnell of the Local Initiatives Support Corporation, “My impression is that the administration at pretty much every level is serious about a balanced policy.  Their purpose is to make more workable rental housing programs.”

Geithner Gains New Powers With Financial Regulation Overhaul

Monday, August 9th, 2010

Treasury Secretary Geithner gains power with new financial overhaul law. With the passage of historic financial reform legislation, Treasury Secretary Timothy Geithner is being given the authority to reshape bank regulations, oversee financial markets and create a consumer protection agency.  Few Treasury secretaries will wield this much influence once President Obama signs the new financial overhaul legislation passed by Congress.

Geithner’s fingerprints are all over the effort to expand financial regulation.  The bill is extremely close to the initial draft he released last summer but also names him — as long as he remains Treasury secretary — as the head of a council of senior regulators.  The legislation also puts him at the head of the new consumer bureau until the Senate confirms a permanent director.  In other words, Geithner will mold the regulator over the next several months.  It also will be his responsibility to work out several issues left unresolved by the bill — for instance, which financial derivatives will be subject to the strict new trading rules and which risky activities big banks will have to spin off.

The legislation “will help restore the great strength of the American financial system, which — at its best — develops innovative ways to provide credit and capital, not just for our great global companies, but for the individual with an idea and a plan,” according to Geithner.  Efforts to win passage of the financial regulatory bill were driven primarily by the Treasury, proof that Geithner has significant autonomy within the administration.

Sen. Christopher J. Dodd (D-CT), who moved the financial overhaul package through the Senate, said it wasn’t his preference to put the Treasury secretary in charge of the new council.  He would prefer that a member of the Federal Reserve board fill that role.  At the same time, he said, having a member of the president’s Cabinet in charge could make the council “more politically responsive.  It gives you some accountability,” Dodd said.

Geithner Gains New Powers With Financial Regulation Overhaul

Tuesday, August 3rd, 2010

Treasury Secretary Geithner gains power with new financial overhaul law.  With the passage of historic financial reform legislation, Treasury Secretary Timothy Geithner is being given the authority to reshape bank regulations, oversee financial markets and create a consumer protection agency.  Few Treasury secretaries will wield this much influence once President Obama signs the new financial overhaul legislation passed by Congress.

Geithner’s fingerprints are all over the effort to expand financial regulation.  The bill is extremely close to the initial draft he released last summer but also names him — as long as he remains Treasury secretary — as the head of a council of senior regulators.  The legislation also puts him at the head of the new consumer bureau until the Senate confirms a permanent director.  In other words, Geithner will mold the regulator over the next several months.  It also will be his responsibility to work out several issues left unresolved by the bill — for instance, which financial derivatives will be subject to the strict new trading rules and which risky activities big banks will have to spin off.

The legislation “will help restore the great strength of the American financial system, which — at its best — develops innovative ways to provide credit and capital, not just for our great global companies, but for the individual with an idea and a plan,” according to Geithner.  Efforts to win passage of the financial regulatory bill were driven primarily by the Treasury, proof that Geithner has significant autonomy within the administration.

Sen. Christopher J. Dodd (D-CT), who moved the financial overhaul package through the Senate, said it wasn’t his preference to put the Treasury secretary in charge of the new council.  He would prefer that a member of the Federal Reserve board fill that role.  At the same time, he said, having a member of the president’s Cabinet in charge could make the council “more politically responsive.  It gives you some accountability,” Dodd said.