But we're not proposing a dramatic expansion, even a very significant expansion from what is the current role they have in the system. And parts of our system that proved too weak and too damaging were largely outside the Fed's capacity to affect. And that is one reason why we have to have a bit of a tightening up of responsibility and accountability and authority with the Fed.
MORAN: Because you already hear on the Hill, Senators – Democratic Senators, saying, we don't want to give more power to the Fed. The Fed is a democratically, unaccountable body. Why should we give them more power?
GEITHNER: Then, again, we listen to those criticisms very carefully and we've adjusted our proposals to reflect those concerns. So, what we're doing is a very modest clarification of responsibility. And we're going to set up a new council, above the Fed, and the other agencies, that brings everyone together, makes sure there are some checks and balances, make sure we're looking at how well these guys are doing their job. Making sure if there are gaps in the system, or mistakes, we can help remedy those things earlier. So we're proposing a balance which I think is very responsive to those concerns.
MORAN: And that brings up another point. You're working with a financial regulation structure that was developed over decades, kind of patchwork.
MORAN: A lot of people said, junk it. Start over. Get a 21st century financial architecture for 21st century finance. Why didn't you do that?
GEITHNER: We're doing the most important things that were the principle causes of the crisis. We're trying to make sure we fix the key things that are going to central to future vulner9+ability of the system. And not take on things that would be nice to try to do, if you had lots of time, and political capital, but would not materially improve the stability of the system or the protections consumers get. So there are other things we could have chosen to do. But we're making a basically, cold-hearted, pragmatic choice. Because we want make sure we're preserving our capital to focus on the things that are central.
Now, if you look at countries around the world, a lot of countries have adopted a model where they've mushed everybody together. And they've centralized the boxes into one place. That has the disadvantage of concentrating authority in one place. And outcomes in those countries have not been materially better than what we saw in this country. So, the best thing do to is to get the rules better. Thicker shock absorbers in the system. Better protection for consumers. Better disclosure, more transparency, better tools for managing crisis. And we're going to... simplify, a bit, the current structure. But we're not going to take on challenges that are not going to be –that were not central to the problems we saw and are not going to substantially improve the functioning of the system.
MORAN: The critics say – there are those who say that what you've done is just layer on more bureaucracy. You got a new consumer agency, you've got a new council, you've got just more layers of bureaucracy in an already complex financial regulation system.