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Senate bank chair calls for creation of super-regulator

THECHAIRMAN of the US senate banking committee has dealt a blow to President Barack Obama&rsquo;s blueprint for financial reform by calling for the country&rsquo;s four banking watchdogs to be merged into a single &ldquo;super-regulator&rdquo;.<br /><br />Senator Christopher Dodd told a US newspaper that he would introduce legislation that would form the basis of the Senate&rsquo;s efforts to restructure the financial landscape.<br /><br />&ldquo;We... need to put in place an architecture that restores confidence and makes people feel that when they engage in financial activities... that they can have confidence in the system,&rdquo; he said.<br /><br />&ldquo;On the other side of this, I don&rsquo;t want to strangle business.&rdquo;<br /><br />Dodd&rsquo;s plans differ significantly from those of President Obama, whose administration pondered, but later rejected, a merger of the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision and the Comptroller of Currency.<br /><br />Instead, the US administration wants to see the Federal Reserve transformed into a system-wide regulator, a solution that the government believes will avoid strenuous opposition from banking lobby groups putting pressure on Congress.<br /><br />Dodd has said that last year&rsquo;s banking crisis was due in part to the fact that institutions were able to pick and choose which regulator would oversee them, creating a situation where agencies relaxed regulation to encourage banks to choose them.