The Fed is to be awarded a number of new powers as part of a major overhaul of the regulation of the US financial sector, Treasury Secretary Henry Paulson announced today.
The move comes as the US Government responds to criticism about how the credit crunch could have been avoided. Its restructure would allow the Fed to become "market stability regulator". This would enable it to look at the books of any financial institution which could threaten the financial system. A new organisation will also be set up to take over the role of the five separate banking regulators and a commission will be founded to establish stricter criteria for mortgage firms. However, the changes will not come into effect until the current problems in the financial markets hav...
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