Obama Overhauls Financial Rules

Will it prevent future financial catastrophes? Obama released his overhaul plan for the nation's financial system Tuesday night, according to The Washington Post. In an 85-page white paper, the White House explained the roots of the current financial crisis: banks exploited gaps in regulation to sell too-expensive loans to borrowers, and funding came from new types of investments that regulators didn't really understand. Firms gave big bonuses to employees instead of squirreling money away in case their plans failed. The solution, according to the White House plan, is to allow the Federal Reserve greater freedom to regulate banks, and to create a Consumer Financial Protection Agency with a broad mandate to overhaul federal regulations, including lending laws.