Chris Dodd to unveil financial reg reform; says GOP "terribly naive"
Sen. Chris Dodd said Republicans were "terribly naive" for wanting more time to study financial regulation reform
Washington, DC — Senate Banking Committee Chairman Christopher Dodd told Reuters he will unveil revised financial regulation reform legislation on Monday and threw down a challenge to Republican lawmakers.
Dodd said on Sunday that his bill, to be released at a press conference, will cover four major areas: ending the assumption that some financial firms are "too big to fail"; dealing with systemic financial risk in the economy; regulating over-the-counter derivatives and boosting protections for financial consumers.
Republican demands for more time to study the issue, conveyed to him in a letter from Senate colleagues on Friday, were "terribly naive and that's being kind," said Dodd, a Democrat.
After months of debate, he said, the road to financial reform is still difficult, but navigable."If you want to work with me ... we can do it. If you don't, you can walk away or delay or say we shouldn't be meeting. But if you're interested in getting a bill, the door's open," he said.
Tightening oversight of banks and capital markets is a top priority of President Barack Obama and Congressional Democrats, but nearly two years since the near collapse of former Wall Street giant Bear Stearns, regulation has changed little.
While the bulk of Obama's reform proposals from mid-2009 were approved in December by the House of Representatives, the Senate has yet to act, with Republicans and financial sector lobbyists working hard to weaken and block new rules.
Dodd said his bill, revised from a November draft, will call for "orderly liquidation" of large financial firms that get into trouble and pose a risk to financial stability.
The goal is to avoid future on-the-fly bailouts, such as those undertaken by the Bush administration in 2008 of AIG, Citigroup and Bank of America.Dodd said his bill will set up a council of regulators "that has power, authority and responsibility to look over the landscape, both at home and abroad, for emerging problems that could pose a systemic risk to our financial system."
He said the bill will contain the same proposals he made in November on slapping new rules on the $450 trillion over-the-counter derivatives market.
"We're very open and willing to accept the proposals that Judd Gregg and Jack Reed have been working on," Dodd said.
On protecting consumers, he said: "I want a very authoritative, very independent consumer division, agency, bureau, however that emerges."He also said that the bill will have some provisions offering investors greater power in corporate governance."On the governance issues, some stuff will be controversial. I suspect a lot of other things have been worked out," he said.