A broad plan for federal oversight of hedge funds, private equity, and derivatives is drawing approval now. But wait till the details emerge
Fresh off his hit performance with the bank-rescue plan, Treasury Secretary Timothy Geithner seems to be on a roll. His broad proposal to overhaul regulation of whole swaths of the financial sector drew applause from most quarters on Mar. 26. Investors didn't seem at all unsettled by the prospect of intensified government oversight, as the Standard & Poor's 500-stock index rose 2.3% and Wall Street closed in on a second straight week of strong gains.
But the plan offered few specifics in many of the areas it addressed, from tougher regulation of complex financial derivatives to new rules for money-market funds. And Geithner steered well clear of some of the most contentious questions facing policymakers—the questions that are sure to turn agreement about broad principles into a pitched, possibly months-long political battle that pits financial interests against consumer advocates and one another.
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