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Monday, March 15, 2010

Taming the banks: Sen. Dodd's compromise bill

Sen. Chris Dodd, D-Conn., puts forth his latest version of financial reform for the Senate's consideration. 11-page summary here, 1336-page bill here. Highlights:

1) "A new independent watchdog, housed at the Federal Reserve," for consumer financial products. Obama wanted a fully independent agency.

2) "Make it undesirable" for banks to get "too big to fail" via "tough new capital and leverage requirements." Stops short of the "Volcker rule" ban on risky investment banking & trading by government-backed commercial & consumer banks. Plus "a safe way to liquidate failed financial firms" and extend Fed authority over non-banks.

3) A new council of regulators would preserve most financial regulators instead of combining them. Together they'd weigh "systemic risks posed by large, complex companies, products and activities." Dodd would also "streamlin[e] bank supervision." Banks could still choose the regulators they like best.

4) SEC and CFTC to regulate derivatives, asset-backed securities, hedge funds, mortgage brokers, payday lenders.

5) "Transparency," but no ban on basic conflicts of interest (issuers will still pay for ratings), at Standard & Poor's, Moody's, and the other credit rating agencies that blessed the bad loans and stupid bonds that broke Wall Street.

6) A new Treasury Department office would "monitor" the state-regulated insurance business.

7) "Say on pay" will make public companies subject boss pay to "non-binding" shareholder votes.
Posted by Joseph N. DiStefano @ 2:55 PM  Permalink | 2 comments
Comments   
  • 0 like this / 0 don't   •   Posted 3:57 PM, 03/15/2010
    oh wait how about we put in jail people would get kick backs from companies they bail out! like chirs dodd and Fannie and freddie. look it up people stop being blind. this market calapse is partially Dodd's fault, he was part of the committee that decided where alot of this money went. its not a coincedence that he has received the most money from fannie and freddie. #2 is obama fyi.
    — sasquatches
  • 0 like this / 0 don't   •   Posted 5:34 PM, 03/15/2010
    This doesn't go nearly far enough to undo the damage Republican policies have caused. Nothing about Credit Default Loans being subjected to insurance regulations? Nothing about the fact that ratings agencies gace AAA rating to worthless packages of mortgages? Nothing to seperate insurance, banking and investment firms? All of the core Republican policies that caused the collapse of the global economy need to be addressed. That means these companies can do the same scam againg and it's legal. Wall Street runs this country.
    — MikeP


2 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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