Over the past month and a half, the U.S. Congress has held a series of hearings to debate the Obama Administration’s proposal to overhaul the American financial regulatory structure. The fates of the SEC, CFTC, and other regulators have been discussed and the failures of consumer protection railed upon. The debate, though, has not yet satisfactorily answered an important question: What are the implications of placing consolidated supervisory authority for the most systemically important banks and non-banks in the Federal Reserve?
