Finance Rule Proposals Raise Viability Questions

Tough as they seem, wull the Obama administration's strict new Wall Street really work? The adminstration's aggresive plan for strict scrunity of hedge funds and other freewheeling investors, part of the biggst expansion of financial restraints siince the Great Depression, is drawing instant opposition from Republician lawmakers and the rules' targets. And skeptics ar questioning whether they would be effective anyway.

Wall Street wizards have proved adept at designing complex financial products to sidestep existing regulations. And Vincent Reinnhart, former director of monetary affairs at the Federal Reserve, says, "You're going to see firms try to figure out how to be under the radar."
For example, private equity investors might try to chop large hedge funds into funds small enogh to operate unregulated, Reinhart said.

Treasury Secretary Timothy Geithner said the nation's economic crisis demands bold action. " We need much stronger standards for openness, transparency and plain common sense language throughtout the financial system."
He told the House Financial Services Commitee.
Republicans wondered whether the overhaul would give federal regulators too much power.

by the associated press