Levitt Applauds Regulatory Reforms, but Says Accounting Standards Ignored

Former SEC chairman and senior adviser with The Carlyle Group Arthur Levitt sat with Bloomberg to discuss the President's proposed regulatory overhaul plan. Although Levitt's reaction was favorable overall, calling it a more balanced plan than what everyone initially feared, he said it still doesn't address accounting standards—something which was a major factor in creating the current economic problems.

Levitt expresses further reservations about the creation of the "so called consumer protection group," saying this only adds another layer of bureaucracy to the situation. He asserts that the Federal Reserve and SEC have the resources to do this job. They should be strengthened, rather than forming a new bureaucracy, which he said will be costly to the government, taxpayers and the system as whole.

Levitt apparently is not alone in this particular sentiment. A statement issued by the Financial Services Roundtable said creating the consumer watchdog group "will not adequately serve the best interests of consumers and their financial institutions" since the agency would separate the regulation of the products from the regulation of the entity. Each regulator "will only have half of the information" and will lead to more confusion with the "possibility of 50 state regimes."