A key U.S. senator has vowed to create a new way of regulating Wall Street, installing a set of tough investor protections and dramatically boosting regulators' scrutiny of securities markets and companies.
"We are going to send a clear message with these modernization efforts: The era of 'Don't Ask, Don't Tell' on Wall Street is over," Senate Banking Committee Chairman Christopher Dodd, D-Conn., said Tuesday at a hearing to gather ideas on improving financial oversight.
Dodd said the approach would be "bottoms up," focusing on consumer protections as opposed to containing risk at the largest institutions and hoping it trickles down.
Congress is poised to tackle an overhaul of financial regulation this year in the wake of the massive government rescue of the financial industry and revelations of huge alleged investment frauds that went undetected by the Securities and Exchange Commission.
Democrats are contemplating giving broad powers to one regulator, probably the Federal Reserve, to monitor any risk that threatens the financial system.
