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Today In the Economic Clusterf#cktastrophe

Mr. Geithner, in his opening statement, called for "comprehensive reform. Not modest repairs at the margin, but new rules of the game."

Geithner Calls for Major Overhaul of Financial Rules (emphasis mine):

The Obama administration on Thursday detailed its wide-ranging plan to overhaul financial regulation by subjecting hedge funds and traders of exotic financial instruments, now among the biggest and most freewheeling players on Wall Street, to potentially strict new government supervision.

The Treasury secretary, Timothy F. Geithner, outlined the plan Thursday before the House Financial Services Committee, where he got a decidedly mixed reception. He said the changes were needed to fix a badly flawed system that was exposed by the current financial crisis. Mr. Geithner, in his opening statement, called for "comprehensive reform. Not modest repairs at the margin, but new rules of the game."

"Very complex, very consequential, very difficult" Mr. Geithner called the changes that he said were necessary, and the sooner the better.

Included in the plan would be the establishment of one single agency "with responsibility for systemic stability over the major institutions and critical payment and settlement systems and activities."

To that end, Mr. Geithner said: "Financial products and institutions should be regulated for the economic function they provide and the risks they present, not the legal form they take," Mr. Geithner said. "We can't allow institutions to cherry pick among competing regulators, and shift risk to where it faces the lowest standards and constraints."

Melissa McEwan writes and edits the blog Shakespeare's Sister.
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