BIRD-WATCHING is high on the list of Hank Paulson's leisure pursuits. This week America's Treasury Secretary made it quite clear which avian creature his country's system of financial regulation most resembled: the albatross. His “blueprint” for change, presented on March 31st, is the boldest attempt to overhaul the rulebook since the Depression, when much of it was written. Most of the proposals are long-term, and will thus be pulled around by the next administration and Congress. But the plan marks an important first step in a much-needed facelift for an outdated regime. “He's teed it up in a way that can't be ignored,” says James Lockhart, director of the Office of Federal Housing Enterprise Oversight, which regulates America's quasi-official mortgage giants, Fannie Mae and Freddie Mac.Though the proposals are entwined with the credit crisis, they predate it: the original impetus, a year ago, was fear over America's waning capital-markets competitiveness. The finished product is thus an odd mix of streamlining and tougher regulation, such as a new oversight body for mortgage markets. The timing struck some as odd too, but the Treasury says it wants to provoke debate, not distract from market woes. The report may also have been timed to head off what one official calls “very silly” new banking rules threatening to emanate from Congress.Read More Here:http://www.economist.com/displaystory.cfm?story_id=10970799&fsrc=nwl