Washington, DC – U.S. Senator Tim Johnson (D-SD) applauded President Obama’s efforts to give regulators more teeth as he proposes the largest regulatory overhaul since the Great Depression. President Obama, his economic team and the Treasury Department today announced its proposal for financial regulatory reform to address the lack of regulatory oversight demonstrated at the start of the current economic crisis.

As we all know, federal regulators were forced to make decisions with few good options last year based on the belief that weakened financial firms were so big and so interconnected that their failure would devastate the world economy.  

When the TARP bill came through Congress last year, I felt it did not go far enough to improve regulation.  Instead, we sent companies the message that if they are bad actors, the government will step in and save companies from their own bad decisions. 

Overall, this is a very complicated task to reform and modernize the financial services regulatory structure.  All reforms Congress considers must help prevent a repeat of the events of the past nine months and must shift the burden away from the American taxpayer and to the financial institutions that were reckless. 

While the devil is in the details, it sounds as though the President’s plan intends to give regulators the teeth they need to do the job, but also the flexibility to make sure our economy grows. 

Over the coming months, the Banking Committee will work closely with the Administration to develop legislation based on today’s proposal to make the needed changes to our regulatory structure and clear the way for a stronger, brighter and more stable economic future.  I look forward to reviewing the President’s proposal in greater detail.

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For more information on Senator Tim Johnson visit his website at http://johnson.senate.gov.