The draft of the Obama Administration's financial plan is circulating this morning, even before the official announcement later today. As expected, the circulating drafts propose a Financial Services Oversight Council to "facilitate information sharing and coordination, identify emerging risks, advise the Federal Reserve ... and provide a forum for resolving jurisdictional disputes between regulators."
That "advise" the Fed on systemic risks part has people concerned. The critique is that the proposal gives the Fed too much power. Yesterday, Senator Mark Warner proposed a more powerful Systemic Risk Council (see the story on the Real Time Economics blog at the WSJ). These statements by Senator Warner, who sits on the Banking Committee, may be the opening shots in the turf wars.
As I've noted before, the networked organizational approach is the correct way to go. Now comes the important process of designing exactly how whatever Council is created will actually work. Let's how the debate that Senator Warner has kicked off is thoughtful and complete.
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