April 26, 2010

Parties Edge Closer on Financial Regulation Bill

Filed under: Uncategorized — ktetaichinh @ 2:35 am
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They may also want to win some more concessions. Mr. Shelby said one flaw in the existing language was that the bill allowed “too much flexibility” for regulators like the Federal Reserve and the Federal Deposit Insurance Corporation in deciding when to step in if a bank makes overly risky investments.

Still, his conciliatory tone, while sitting alongside Senator Christopher J. Dodd of Connecticut, the committee’s ranking Democrat and sponsor of the bill, contrasted sharply with the combative posture taken in recent weeks by the party’s Senate leader, Mitch McConnell of Kentucky, who has repeatedly warned that the bill would set the stage for “endless taxpayer-financed bailouts.”

Even Senator McConnell sounded like less of a doomsayer about the bill. Appearing on “Fox News Sunday,” he said, “We don’t have a bipartisan compromise yet, but I think there’s a good chance we’re going to get it.” Still, he added, “What I’d like to see is an opportunity to prevent the Democrats from doing to the financial services industry what they just did to the health care of this country.”

To win his support, he said, the bill needs to eliminate what he called the $50 billion bailout fund and create a system where creditors can expected to be treated fairly — unlike what happened in the bailout of General Motors where, he contended, the government treated the unions better than the bondholders. He also said the bill needs to augment requirements for how much capital banks have on hand to make it virtually impossible for banks to be too big too fail.


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