Who Regulates Whom? An Overview of U.S. Financial Supervision [February 24, 2009] [open pdf - 769KB]
From the Summary: "Federal financial regulation in the United States has evolved through a series of piecemeal responses to developments and crises in the markets. This report provides an overview of current U.S. financial regulation: which agencies are responsible for which institutions and markets, and what kinds of authority they have. U.S. banking regulation is largely based on a quid pro quo that was adopted in the 1930s in response to widespread bank failures. [...]. A number of financial markets are unregulated, including some of the largest. No federal agency has jurisdiction over trading in foreign exchange or U.S. Treasury securities; nonbank lenders fall outside the regulatory umbrella; and hedge funds, private equity firms, and venture capital investors are largely unregulated (although their transactions in securities and derivatives markets may be). The United States has never attempted a wholesale reformation of the entire regulatory system comparable to the 1986 'Big Bang' in the UK, which reorganized regulatory agencies across industry lines and sought to implement a consistent philosophy of regulation. In the wake of the current financial turmoil, however, such a reevaluation is possible, and a number of broad restructuring proposals have already come forward. This report does not attempt to analyze the strengths and weaknesses of the U.S. regulatory system. Rather, it provides a description of the current system, to aid in the evaluation of reform proposals. It will be updated as warranted by market events."
CRS Report for Congress, R40249