Source: Brady Dennis, Washington Post ( Free Registration )

As lawmakers on Capitol Hill inch closer toward overhauling the nation’s fractured financial regulatory system, each hour of debate, each tweak of legal language, each tedious roll call carries the potential to generate colossal changes in the relationship between Washington and Wall Street.

One proposal, spearheaded by Rep. Ron Paul (R-Tex.) would usher in unprecedented scrutiny of the Federal Reserve by allowing auditors to examine every aspect of the central bank’s actions. That measure could come to a vote in the House Financial Services Committee on Thursday, though its prospects for success remain uncertain.

Another provision, pushed by Rep. Paul E. Kanjorski (D-Pa.), would empower federal regulators to dismantle financial firms before they grow so large that their failure could endanger the entire financial system—even if those firms appear to be healthy and well-capitalized.

Read Full Article: Ambitious bills could remake financial landscape