By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa
DESIRED END RESULT BY 2014 (TO BE IMPLEMENTED BETWEEN 2010-2020 BY THE PROPOSED OVERSIGHT COUNCIL IN THE CURRENT SENATE BILL
• Fed performs monetary policy only.
• All financial regulation, including SEC, CFTC and FDIC, through the Oversight Council, shifts to a new financial markets regulatory agency including consumer protection.
OVERALL FRAMEWORK
See Financial Regulatory Reform
CONSUMER PROTECTION
• All financial markets regulatory agencies shall be merged into one separate agency together with consumer protection.
BASEL II
• Basel II is repealed (see FRAMEWORK).
• All countries and/or regions such as the EU must be expected to reform their own regulatory regimes and be subject to meta-supervision by the International Monetary Fund (IMF).
DERIVATIVES
See Regulating derivatives.
TIMELINE FOR IMPLEMENTATION
OVERSIGHT COUNCIL SHALL REPORT TO THE UNITED STATES CONGRESS TWICE A YEAR ON MEETING THE OPERATIONAL RESPONSIBILITIES OF IMPLEMENTING THE LEGISLATION DELEGATED TO IT IN THE REGULATORY REFORM LEGISLATION BY THE UNITED STATES CONGRESS.
2010
• Basel II is repealed by the United States and replaced by a progressive, refundable, interest bearing contingency tax collected by the Federal Reserve.
• To regulate the quality of derivatives, all Credit Default Swaps (CDS) issuance by the Federal Reserve only.
• The transition of all derivatives to exchange traded instruments by 2014 may initially permit some exchange traded and some Over The Counter (OTC) derivatives and private clearinghouses.
2010-2014
• Fed performs monetary policy only.
• Exchange Traded Derivatives only. Hedge funds to meet reporting requirements for transparency.
• CDS issuance returns by 2020 to private capital markets.
• All financial regulation, including SEC, CFTC and FDIC, through the Oversight Council, shifts to the new financial markets regulatory agency including consumer protection.
• All countries and/or regions (such as the European Union) must be expected to reform their own regulatory regimes and be subject to meta-supervision by the International Monetary Fund (IMF).
