Financial Products Safety Commission
See also Consumer Financial Protection Agency
Financial Products Safety Commission (FPSC)
The concept is that a government agency or commission would review new financial products, similar to how the U.S. Food and Drug Administration reviews new drugs. Products would be reviewed to ensure the risks could be "safe for consumption" and effectively communicated to investors or homeowners, depending on the product. Related legislation has been proposed in Congress. Financial Products Safety Commission Act S.566
Arguments for a FPSC
Economist Joseph Stiglitz has argued that a government agency should review new financial products.
Arguments against a FPSC
Critics may argue that such a commission would slow financial innovation, adversely impact Wall Street profit, or reduce credit availability if popular products (such as adjustable rate mortgages) are deemed inappropriate for consumers.
If people want U.S. government guaranteed safety, they can put their money in: cash, an FDIC insured account, or in U.S. Treasury securities. The whole point of other securities is to allow people to make their own judgment on risk instead of accepting the opinion of a financial dictator such as FPSC.