By Joseph Russell- Talk Radio News Service

House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) seemed to be a bit distracted Wednesday during the committee’s testimony on financial regulatory reforms proposed by the Obama administration.

Frank read a newspaper, fell asleep, and then left early during testimony from Chairman Mary Schapiro of the Securities and Exchange Commission (SEC) and Chairman Gary Gensler of the Commodity Futures Trading Commission (CFTC).

Frank’s lack of attention highlighted the disapproval shared by Republicans on the committee that the Obama administration’s proposals do not address the specific needs of financial regulatory reform, and vastly expand the SEC’s power.

“Perhaps an even more fundamental question needs to be asked here,” said Rep. Scott Garrett (R-NJ). “Will standardized business be significantly related to the recent meltdown of our financial markets? And if not, why are we prescribing cure for a non-existing ailment.”

The Obama administration has proposed a broad spectrum of reforms that would expand the U.S. financial regulatory system. The administration’s plan calls for derivatives and hedge funds to be regulated, a stiffening of securities and futures regulation, and regulation of the credit rating agencies by the SEC. This committee meeting was the first of several that will examine these proposals.

By Candyce Torres, University of New Mexico-Talk Radio News Service. “We can’t allow institutions to cherry pick among competing regulators and shift risk to where it faces the lowest standards and weakest constraints, and we need to recognize that risk does not respect national boarder’s. Markets are global and high standards at home need to be complemented by strong international standards enforced more evenly and fairly,” said Secretary of the Treasury Timothy Geithner

Today the U.S. House of Representative’s Committee on Financial Services held a hearing on addressing the need for comprehensive regulatory reform with Geithner. Geithner gave his testimony before Congress based on the complex and vulnerable issues of failed financial institutions, and financial pressures which have contributed to the erosion of confidence in the overall financial system.

Chairman Barney Frank (D-Mass.) expressed that Congress will have to decide whether or not the federal government has sufficient authority existing in dealing with systemic risk. He indicated that the focus of the hearing was to allow Congress to give a governmental agency the power to restrict excessive leverage in order to minimize the excessive debt of failing institutions.

Geithner talked about his objective to craft the framework that will prevent and manage financial crises while concentrating on the substance of reform. He concluded the framework will focus on 4 key areas: systemic risk, consumer and investor protection, eliminating gaps and streamlining regulatory framework and international coordination.

by Christina Lovato, University of New Mexico-Talk Radio News Service

At Speaker Nancy Pelosi’s weekly press conference she addressed the aid given to the auto industry during the economic crisis. Pelosi said that any money given to the auto industry must be considered a “lifeline” and not “life support.”

by Michael Ruhl, University of New Mexico and staff-Talk Radio News Service,

At a press conference House Financial Services Committee Chairman Barney Frank (D-Mass.) spoke on what the federal government is doing to deal with the economic crisis. Frank said that it is likely that a federal entity will be empowered to regulate systemic risk, and that this entity will very likely be the Federal Reserve. He said that the powers given to the Federal Reserve will be newly created powers of the federal government, and will not be taking powers from other organs of the federal government. Frank said that a “prohibition” on irresponsible subprime lending would be necessary, because if enough bad loans are made, it is “hard to protect yourself against them”. Frank continued that the government wants the institutions “To be safe and sound”, but that the goal is for lending to increase. He also said that the House is working closely with the Obama Administration, and that their aim is to coordinate Systemic Risk Regulation with allies in Europe and Asia.

Chairman Frank also spoke of other priorities of the House Financial Services Committee in the coming year, which included refocusing on debt relief and expanding consumer protection. Frank also said that the Federal government will take a more active role in building houses and keeping people in their homes.

When addressing the topic of America borrowing so much money from foreign countries, in particular China, Frank said that he is alright with these lending arrangements, because he doesn’t feel it gives those foreign governments undue influence on America. However, Frank said that spending is too high in some areas, particularly in defense spending that the country is engaging in.