Galvin slams plan to overhaul financial regulation

The top securities regulator in the Bay State is calling the White House's proposal to overhaul the nation's financial regulatory system "a disastrous step backward."

Massachusetts Secretary of State William Galvin (right) says the proposal released today would pre-empt the role of state regulators and give too much power to the federal government.

Galvin argues that the federal government has repeatedly failed to protect investors from financial troubles such as the subprime mortgage mess, while states have often taken the lead.

The proposal by US Treasury Secretary Henry Paulson (left) would give the Federal Reserve more power to protect the stability of the entire financial system. Paulson also wants to create one super agency in charge of business conduct and consumer protection. (AP)