The Government Accountability Office's report on the "complex and fragmented" U.S. financialregulatory structure is the latest in a debate Oliver Ireland, partner at Morrison& Foerster, has been hearing for decades, he said in an interview.

"Dodd Frank was a big opportunity to streamline the agencies,and it wasn't done, I think, for political reasons," he said.

The GAO recommended Congress consider consolidating the numberof agencies that oversee safety and soundness in depository institutions, as wellas combining the regulators of the securities and derivatives markets. The Feb.25 report also recommended congressional action to change the mission or expandthe powers of the Financial Stability Oversight Council because the agency's recommendationsare not binding. It also recommended transferring prudential regulators' consumerprotection authorities of large depository institutions to the Consumer FinancialProtection Bureau.

Overall, the GAO report didn't suggest a lot, Ireland said. Argumentsfor and against consolidating the nine federal financial agencies are valid, hesaid. Many agencies do overlap, he said, but having different regulators also createsopportunities for innovation. For example, the Federal Reserve a rule April 1 to allow certaininvestment-grade general obligation state and municipal securities to count as high-qualityliquid assets, he said. Other agencies that require the same liquidity coverageratios have not made a change to their HQLA rules, which do not allow muni bondsto be counted as liquid assets.

As for FSOC, Ireland said a lot was still up in the air in regardto its authority in light of MetLifeInc.'s recent win against the agency to shed its nonbank SIFI tag.

"I think you need to see how that settles out to see whethersomething needs to be done in terms of that FSOC authority," he said.