In a chart accompanying an article on the financial reform bill approved by the House-Senate Conference Committee the Washington Post told readers that:
"Ahead of the crisis, there was no agency in the government responsible for monitoring the financial system as a whole and looking for potential threats to its health."
This is not true. There was an agency that had responsibility for the monitoring the financial system as a whole and looking for potential threats to its health. It is called the "Federal Reserve Board." This is a main purpose of the Fed and it has fulfilled this role on several occasions, most notably when it intervened to halt the stock market crash in 1987 and to arrange the orderly unraveling of the Long-Term Capital Hedge Fund in 1998.
This point is important, because the problem that led to this crisis was not a lack of regulatory authority as this assertion implies. Alan Greenspan and Ben Bernanke had all the power they needed to rein in the housing bubble before it grew large enough to threaten the health of the economy. They chose to not use this authority either because they did not recognize the bubble or did not consider it a serious problem.
There is absolutely no reason to believe that if we had the newly created "Financial Services Oversight Council" in place in the years 2002-2007, when the housing bubble was inflating, that anything would have been different. Greenspan and Bernanke both repeatedly insisted that everything was fine in the housing market and the financial system more generally.
There were very few dissenting voices to the Greenspan-Bernanke position. Those in authority (and newspapers like the Washington Post) had no problem ignoring these dissenting voices. If there had been a Financial Services Oversight Council in the years when the bubble was inflating it almost certainly would have been staffed entirely by people who shared the Greenspan-Bernanke view. There is no reason whatsoever to believe that it would have done anything to avert the current economic crisis.