This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8107751.stm

The article has changed 4 times. There is an RSS feed of changes available.

Version 0 Version 1
US Treasury defends bank reforms US Treasury defends bank reforms
(20 minutes later)
The US Treasury has defended huge reforms of the banking system and urged Congress to pass the changes soon.The US Treasury has defended huge reforms of the banking system and urged Congress to pass the changes soon.
US Treasury Secretary Timothy Geithner said: "Now is the time to pursue the essential reforms," during testimony made to the Senate Banking Committee.US Treasury Secretary Timothy Geithner said: "Now is the time to pursue the essential reforms," during testimony made to the Senate Banking Committee.
The plans involve stricter market oversight and better consumer protection among others.The plans involve stricter market oversight and better consumer protection among others.
But there is much uncertainty over the details of the reforms and strong lobbying in Congress is expected.But there is much uncertainty over the details of the reforms and strong lobbying in Congress is expected.
In prepared remarks made to the committee, Mr Geithner said: "We may disagree about the details, and we will have to work through those issues."In prepared remarks made to the committee, Mr Geithner said: "We may disagree about the details, and we will have to work through those issues."
"But ordinary Americans have suffered too much; trust in our financial system has been too shaken; our economy has been brought too close to the brink for us to let this moment pass," he said."But ordinary Americans have suffered too much; trust in our financial system has been too shaken; our economy has been brought too close to the brink for us to let this moment pass," he said.
The plans include:The plans include:
• A dedicated agency to protect consumer interests and regulate mortgages and credit cards.• A dedicated agency to protect consumer interests and regulate mortgages and credit cards.
• Consolidating some regulatory agencies and giving the Federal Reserve greater oversight powers• Consolidating some regulatory agencies and giving the Federal Reserve greater oversight powers
• A new oversight council uniting the heads of existing agencies to improve regulation• A new oversight council uniting the heads of existing agencies to improve regulation
• Greater financial cooperation internationally.• Greater financial cooperation internationally.
'Inflated view''Inflated view'
President Barack Obama called the changes, set out on Wednesday, the biggest overhaul of the US system of financial regulation since the 1930s.President Barack Obama called the changes, set out on Wednesday, the biggest overhaul of the US system of financial regulation since the 1930s.
Speaking on Thursday, Democrat Senator Charles Schuman hailed the plans, saying they were an "excellent framework", and underlined in particular his support for the dedicated consumer agency, which he called an "essential" step.Speaking on Thursday, Democrat Senator Charles Schuman hailed the plans, saying they were an "excellent framework", and underlined in particular his support for the dedicated consumer agency, which he called an "essential" step.
The new consumer protection agency is aimed at stopping misleading practices by credit card lenders and mortgage brokers.
But one area of concern has been the greater powers given to the Federal Reserve, which some argue is already overburdened with trying to address the recession.But one area of concern has been the greater powers given to the Federal Reserve, which some argue is already overburdened with trying to address the recession.
Senator Christopher Dodd, a key member on the Senate Banking Committee, had concerns about giving the central bank authority to oversee the biggest players in the financial market.Senator Christopher Dodd, a key member on the Senate Banking Committee, had concerns about giving the central bank authority to oversee the biggest players in the financial market.
"There's not a lot of confidence in the Fed at this point," he said."There's not a lot of confidence in the Fed at this point," he said.
This point was echoed by leading Republican Senator Richard Shelby, also on the Senate Banking Committee, who said the plan implied a "grossly inflated view" of the Fed's ability.This point was echoed by leading Republican Senator Richard Shelby, also on the Senate Banking Committee, who said the plan implied a "grossly inflated view" of the Fed's ability.
Senator Shelby said: "I do not believe that we can reasonably expect the Fed or any other agency to effectively play so many roles," citing its existing responsibility regarding monetary policy and bank regulation.
But Mr Geithner defended the plan, saying the Federal Reserve was the best-placed organisation to have such oversight powers over large financial firms whose failure could threaten the economy.But Mr Geithner defended the plan, saying the Federal Reserve was the best-placed organisation to have such oversight powers over large financial firms whose failure could threaten the economy.
Council
Another question that has been asked is whether it is essential to create new institutions - namely the new council of regulators, the Financial Services Oversight Council - or whether the existing system could simply be improved.
The council, which would be chaired by the Treasury secretary, would assess risk across the broader market and liaise over the supervision of the banking system, but would not have the power over big finance firms.
While the Fed will gain oversight powers, it will shift some of its powers to the dedicated consumer protection agency.
Mr Geithner argued that this meant "a substantial diminishment of authority, preoccupation and distraction".