Needed - a NEW fiscal regulatory agency

The Washington Post has an excellent article on the need to seriously tighten federal fiscal regulation. (Why neither House nor Senate, while the current iron-is-hot leverage moment exists, isn't attaching new regulatory measures to Obama's economic stimulus proposal, I don't know.)

The article then raises the question as to whether the Federal Reserve should get new powers to do this, or should some other extant federal agency, or should we start some new agency?

Without plumping for option 2 or 3, I'll say a definite no to Option 1. The Fed doesn't need these new powers.

First, it's failed to adequately use the powers it has, both at The Fed and at the NY Fed, where new Treasury Secretary Tim Geithner failed badly in overseeing investment bank. (Peter Principle at work for the first time in the Obama administration.)

Second, the length of terms of Fed governors, and the cult-like status that Greenspan (and, partially Volcker before him) have arrogated, make this a no-go without further structural reforms of the Fed.