Home | Business News | Browse by Publication | F | Financial Adviser

Global village.

Article Excerpt
Byline: Alex H Rene and Sarah Thomas

Plans for a reform of the US financial regulation model may seem familiar to those across the pond

By announcing proposals for a significant package of reform to improve the framework and policies of US financial services regulation, the Obama administration hopes that a new risk regulator and a series of detailed changes to existing regulation will do a much better job of predicting, detecting, and minimising the effects of another financial crisis.

The defining feature of the current system of financial services regulation in the US is the number of separate agencies participating in the regulatory process. Unlike the reforms made in the UK in 2001 to create the FSA, the US still has an alphabet soup of different agencies responsible for different products and sectors within financial services. The reform plan is ambitious in that it proposes to create new regulators and to disband some others.

The proposals do not go so far as to create a single overarching regulator for the financial sector. Some commentators have suggested that is a missed opportunity. However, given that the single regulator model of the FSA was no more successful than the US regulators at detecting and avoiding the financial crisis in the UK, the emphasis...