In Henry Paulson's blueprint, financial regulation would have been centralized, apparently in the Treasury Department. Paul Volcker, with Tim Geithner's pre-appointment approval, also wanted to centralize, but apparently in an independent regulator - perhaps he was thinking of the Fed, resistant to the political winds.
So what should we make of Geithner's call for a systemically significant regulator (among lots of other things - a lengthy piece of legislation, organizing new exchanges, collecting lots more information, and with new, and especially countercyclical, capital requirements (that means banks would have to save more when times are good) is on the way)?
He might go too far - super-regulators don't face competitive pressure to be good regulators, unless you believe that globalization can provide that competition. And he might not go very far at all - the President's Working Group already requires the patchwork quilt of regulators that we do have to meet. Maybe the superregulator is just regulation by committee with monthly meetings. Finding the Goldilocks just right part of reform will not be easy.
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