Government Authority To Shut Down Troubled Institutions | featured news

President Barack Obama on Tuesday embraced a House bill that would give the government unprecedented power to seize bank holding companies and other large financial firms teetering on the brink of collapse and stick their competitors with the cost....

Some senators criticize a plan that would give the Federal Reserve more power to police large companies.

The plan would give the government new powers to seize key companies whose failure jeopardizes the financial system, as well as creation of a watchdog agency to look out for consumers' interests.

The Obama administration this week will propose the most significant new regulation of the financial industry since the Great Depression, including a new watchdog agency to look out for consumers' interests.

The top two U.S. financial officials told lawmakers angry over bonus payments to AIG executives that the government needs authority to shut down troubled institutions like the giant insurer to avoid future bailouts.