4883225The White House is moving closer to recommending the creation of a single agency to regulate all banks, according to a Wall Street Journal report Wednesday.
That would move the U.S. away from the network of federal regulators that was seemingly powerless to protect the country from the financial crisis that has choked the economy since last year.
Treasury Secretary Timothy Geithner and other officials are expected to include the recommendation in a proposal to Congress in the next few weeks, according to the report.
Under the plan, which the Journal says is still in flux, the Federal Reserve and Federal Deposit Insurance Corp. would be stripped of their supervisory roles, though both agencies would gain other powers. The Office of the Comptroller of the Currency and the Office of Thrift Supervision would be also consolidated.
The Obama administration wants the Fed to oversee systemic risk issues in the economy and the FDIC to expand its authority to take large non-banks into receivership.
Under the current regulatory structure, a state and federal regulators share responsibility in overseeing banks. The Obama administration has said that, while it wants to consolidate the federal effort, it would not seek to get rid of the dual oversight. The new agency would be secondary regulators of state banks and primary overseers for nationally chartered banks and thrifts.
The current regulatory agencies are expected to resist any shifts in power and it is unclear how receptive Congress will be to the plan.
© 2009 CBS Interactive Inc. All Rights Reserved.