WASHINGTON — Senior administration officials are considering the creation of a single agency to regulate the banking industry, replacing a patchwork of agencies that failed to prevent banks from falling into the worst financial crisis since the Great Depression, according to three people familiar with the matter.
The agency would be a key element in a sweeping administration plan to overhaul financial regulation, which officials hope to unveil in the next few weeks, including the creation of a new authority to police risks to the financial system and a new agency to protect consumers, the sources said. Most of the proposals would require legislation.
"The president is committed to signing a regulatory reform package by the end of the year, and officials at the White House and the Treasury Department are continuing work with Congress on the final phases of a proposal, but there is no final proposal in place and any announcement will not be for a couple of weeks," White House deputy spokeswoman Jennifer R. Psaki said.
Senior officials have reached agreement on some aspects of the plan, according to a person familiar with the discussions.
They favor vesting the Federal Reserve with new powers as a systemic risk regulator, with broad responsibility for detecting threats to the financial system. The powers would include oversight of previously unregulated markets such as trading in derivatives and of market participants such as hedge funds.
Officials also favor the creation of a new agency to enforce laws protecting consumers of financial products such as mortgages and credit cards. And they want to merge the Securities and Exchange Commission and the Commodity Futures Trading Commission, which share responsibility for protecting investors from fraud.
Other aspects of the plan remain under discussion, sources said, speaking on condition of anonymity because they were not authorized to disclose details.
Among these ideas is the creation of a single agency to regulate banks. The new regulator would assume the responsibility for the safety and soundness of banks, currently divided among the Fed and three other agencies: the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Deposit Insurance Corp.
