Speaking to members of the Senate Committee on Foreign Relations Tuesday, U.S. Treasury Secretary Timothy Geithner outlines two key elements of financial reform in the United States: The capacity to manage the failure of financial institutions and limited emergency authority. (0:31)
By Travis Martinez – University of New Mexico/Talk Radio News Service
Senate Banking Committee Chairman Christopher Dodd (D-Conn.) released his version of “sweeping” financial reform on Tuesday. Dodd’s proposal will restructure and create a new architecture to the financial regulatory system.
“It is the job of the Congress to restore responsibility and accountability in our financial system to give Americans the confidence that there is a system in place that works for and protects them,” said Dodd during a press conference.
The 1100-page draft would create a new independent watchdog within the proposed Consumer Financial Protection Agency. It would also allow for a single financial federal regulator whose job it would be to end “too big to fail” companies and protect businesses and individuals from systemic risks.
“Our plan will stop abusive practices by creating an independent Consumer Financial Protection Agency with one mission: standing up for consumers,” said Dodd.
While Dodd’s proposal differs from those put forth by the House Financial Services Committee and the White House, it would address the substantial problems that helped cause America’s financial crisis.
Dodd told reporters he hopes to move the bill through committee during the first weeks of December. In the meantime he said, he will be welcoming Republican suggestions on the legislation.
Rep. Barney Frank (D-Mass.) says he longs for the “good ole days when I thought TARP is what you used to cover up the infield whenever it was raining.” Frank made the remark during a discussion of financial regulatory reform at a National Press Club luncheon. (0:05)
Commodity Futures Trading Commission Chairman Gary Gensler recommends two new “regimes” to regulate the financial market and oversee derivatives. (0:24).
Former Judge Andrew P. Napolitano says that President Barack Obama’s financial reforms “does not respect” the U.S. Constitution. (0:43)
Speaking to a group of reporters following the President’s speech on overhauling the nation’s financial regulatory system, Senator Chris Dodd (D-Conn.) called Obama’s plan a “step in the right direction.”
Dodd described the President’s plan, which would give the Federal Reserve the ability to monitor risky investments made by financial companies, as an effort to reinvigorate the marketplace.
Although the Senator admitted that there is “not a lot of confidence in the Fed right now,” he professed that the agency has the necessary experience to properly assume this new responsibility. Dodd added that “sitting around, hoping things will work,” should not be the President’s way of dealing with this nation’s current financial mess.
Congressman Barney Frank (D-Mass.), who joined Dodd in speaking to reporters afterwards, took a swipe at Republicans, accusing them of turning a blind eye over the years as major financial companies made risky investments.
During his speech, President Obama described his plan as a means of “leveling the playing field,” for investors, both big and small. The President stressed his desire to promote free and fair markets by closing loopholes that exist in the current financial system. Specifically, Obama suggested it was time to crack down on intricate financial instruments such as derivatives, which he described as being “so complex, it’s impossible to know their actual value.”
The President also spoke of the need to move the country away from a bubble-based economy, adding that it is the duty of his administration to prevent scenarios in which private innovation negatively impacts the marketplace.
Obama also proposed holding mortgage bankers to higher standards, requiring hedge fund advisors to register with the FCC and creating an independent Consumer Financial Protection Agency to eliminate small print and ‘gotcha’ clauses found in mortgages, credit card and other financial agreements.
The President referred to these proposals as “common sense rules.”
