Volcker offers appealing ideas to streamline financial regulation

Paul Volcker headed the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan and was generally credited with reining in inflation. He has been praised over a long career in government, with interruptions for careers in the private sector, by members of both major political parties.

And it was Volcker who headed President Obama’s Economic Recovery Advisory Board in the Great Recession. He played a significant role in helping to shape changes in the financial system that helped the nation rebound.

So when the 87-year-old Volcker speaks, Wall Street and Washington listen. Now, he says, oversight of the country’s financial institutions needs to be simplified. Volcker says there are too many agencies and too much confusion in an oversight system he says hasn’t changed since the Great Depression.

As the Associated Press reports, while consumer and finance rules changed for the better after the recession, other parts of the regulatory system did not. That means that several agencies divide the duties of oversight and supervise the rules on different types of banks and other financial institutions.

Volcker says the Federal Reserve should remain the guardian of financial stability, but that a new, independent authority should take over oversight “functions” now under the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Some agencies would be merged under Volcker’s plan.

If Volcker’s ideas can bring simplicity to the oversight process, while making it stronger, then President Obama and Congress should move ahead to put them into practice.

This story was originally published April 22, 2015 at 8:00 AM with the headline "Volcker offers appealing ideas to streamline financial regulation."