Okay, those are actually three compound questions.....

If you think "systemically significant" is an interesting question under US proposals, you should see what they're doing over in the EU. Both the CRA Regulation and the proposed AIFM Directive expand the concept to cover everything from certain rating agencies to certain private equity funds. At this point, there's no definition of what constitutes a "systemically significant" rating agency or private equity fund, but I imagine they'll import Justice Stewart's jurisprudence to resolve the issue at some point.

If done properly, I can imagine a financial products regulator might make sense. Fed, SEC, et al. regulation contains 2 disparate (and not necessarily mutually compatible) concepts -- market regulation and investor/consumer protection. They don't have to belong together, and arguably they shouldn't in an environment where most investors now access the capital markets indirectly, through institutions. Making sure a market is clean and making sure institutions don't rip off their customers can be seen as two different tasks. One recurring criticism of the Fed (generally) and the SEC's Division of Trading & Markets is that they focus too much on market efficiency or firm stability and not so much on the micro-level interactions between the firms and their customers. Separating the two functions might make sense.

Excellent observations about the benefits of a consumer financial products regulator by MDF in the comments (IMHO).

Those are all such complicated questions. And only time will prove whatever answers we come up with for them.

The second question is the easiest, I think. It involves giving the Fed the pre-bankruptcy powers that the FDIC has over banks. Most notably, this includes the power to purchase assets or broker sales to third parties free of liens, and to provide loans with priority in bankruptcy similar to that of debtor-in-possession financing in bankruptcy prior to the filing of a bankruptcy petition.

The justification for the financial products regulator is to have a regulator whom one can escape simply by creating a new type of non-bank financing or investment. Many existing financial products regulations (like the ban on taking security interests in certain household goods) involves several parallel sets of regulations for different institutions, which would happen just once with a new regulator. I doubt that disclosure would be the approach taken -- substantive regulation either directly or through safe harbor transactions with onerous methods of claiming an exemptioon would be used instead.

"Systemically significant" is simply a code word for "too big to fail." I doubt that it would be applied outside the financial industry, where bailouts on a "too big to fail" basis are most commonly requested at first.