From Naked Capitalism:

The Washington Post reports that Treasury will seek the power to take over insurers, hedge funds, and investment firms. Given the Treasury's reluctance to assume control over clearly insolvent banks (Citi assuredly, probably Bank of America), it seems curious indeed that it is asking to extend authority that it is patently reluctant to exercise.

Moreover, elements of this appear, to put it mildly, misguided. Insurers are regulated by states. Does the Treasury, in supplanting state authority, intend to put in place the needed supervisory apparatus? Does anyone at Treasury have the foggiest grasp of insurance accounting (which separately, is a bit of a mess)?

And AIG, poster child of insufficient regulation, was overseen at the parent level (which is where the black hole creating Financial Products unit sat) by the Office of Thrift Supervision (no joke), which is an agency of the Treasury! So the Treasury is acting like it needs more authority to prevent future AIG's when its own agency was responsible for the doomsday machine part of AIG.

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