Kanjorski: Fed unlikely to emerge as key regulator

The Federal Reserve is unlikely to emerge as the central regulator of financial institutions under reforms proposed in Congress, one key Democratic lawmaker said Wednesday.

Rep. Paul Kanjorski (D-Pa.), the chairman of the Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises, said that lawmakers are considering breaking with reforms proposed by the Obama administration that would have put the Fed in a key position to oversee financial institutions.

"I would not put my money on the Fed, and it's going to be very difficult to combine all of the agencies," Kanjorski said during an appearance on CNBC, also rejecting Senate Banking Committee Chairman Chris Dodd's (D-Conn.) recent suggestion that a single agency be created to encompass all financial regulation.

"I think we will get a consolidation of some of the regulatory agencies, and I doubt the Fed that's going to get the type of the power that's needed in an agency there," Kanjorski added.

The Fed has come under scrutiny from lawmakers in both parties over the past year for its role in facilitating and administering large bailouts for Wall Street firms in the wake of the recent financial crisis. The monetary board rejected a voluntary audit from the Treasury this week, though lawmakers have threatened passing legislation to force the Fed to open its books.

Kanjorski asserted that such an effort is unlikely to proceed because the Fed probably would not be the central regulator in the end, but acknowledged a disinclination by lawmakers "to put that much economic power and more strength than the presidency of the United States in one single appointed official."

The veteran Pennsylvania Democrat said that many of the Obama administration's proposed reforms have been drafted into legislation, though, and that mark-up would take place within weeks, with a target date of passing a bill out of the House between Thanksgiving and Christmas.