From Shahien Nasiripour at Huff Post:
If the White House and congressional leaders get their way, the vaunted new oversight council charged with overseeing systemic risk in the financial markets will actually be a house organ of the Treasury Department, lacking the independence required to challenge decisions by government regulators, among others.
Rep. Keith Ellison (D-Minn.) last week tried to fix that, by offering an amendment in the House Financial Services Committee that would give the council an independent staff and independent source of funding. But he was forced to withdraw the amendment after it became clear that he wouldn't get Chairman Barney Frank's approval, said a source familiar with the committee's deliberations....
As proposed by the Obama administration, the House bill calls for the council to be headed by the Treasury Secretary, who would pick his own staff from within the Treasury Department.
But not only is the council supposed to keep watch over firms and activities that pose a risk, it's also supposed to oversee the work of other regulators in mitigating threats and supervise financial regulation as a whole, according to the bill's language. In short, it has a mandate to watch over everything that could possibly endanger the financial system - including inaction and incompetence by regulators.
The independence of the council is in question, experts say, because it will be overseen by someone whose actions it is supposed to examine and question -- the Treasury Secretary -- who will also be able to handpick the staff that is supposed to act as independent watchdogs.
