The White House’s earlier plan to merge many of the regulators overseeing the financial services industry is likely to be scrapped, The Wall Street Journal reports.

For one, the Securities and Exchange Commission and the Commodity Futures Trading Commission will not be merged, nor will the various banking regulators, namely the Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.

Instead, officials in the Obama administration say they will empower existing regulators to limit risk-taking and to monitor for systemic risk, to do a better job of protecting investors and to increase capital requirements at banks. Hedge funds will also likely be regulated for the first time, and insurance regulation could be handled at the national rather than the state level.

But some critics feel that the government should increase oversight through centralization and is, instead, bending to political pressure. “We are in a very serious situation, said Hal Scott, a professor at Harvard Law School. “The regulatory system has demonstrated its inability to function, and I really think it’s incumbent on somebody to do what’s right.”

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