Dodd introduces financial reform bill to prevent future ‘economic carnage’

Dodd introduces financial reform bill to prevent future ‘economic carnage’

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, March 15 – Pointing to “economic carnage” with 8.4 million jobs lost and some seven million homes foreclosed, Senate Banking Committee Chair Chris Dodd (D-CT) introduced a 1,336-page financial reform bill Monday. He said that with no financial reform on this scale since the 1930s – and with only about 65 days left in the current legislative session – “it is certainly time to act” without any further delay or any further unprotected risk to the U.S. economy.

Dodd explained that based on extensive hearings over the past year and plenty of input from Republicans as well as Democrats, “we’ve worked in a bipartisan fashion, or tried to, to reach as much consensus as possible.” He acknowledged that his present bill does not have any Republican co-sponsors yet but held out the hope that bipartisan support will develop at some point. He noted that meetings continue with Republicans about provisions in his bill and that mark-up of his bill will begin next week.

Dodd said his aims for the bill include bringing  regulation up to date, to correct “the long-standing failure of our regulatory structure to adapt to our changing financial systems and prevent the sort of dangerous risk-taking that led us here.” He added that he’s seeking to construct an early warning system “so that someone is tasked with looking out for the next crisis which will surely come . . . There will be shocks in our system in the future and we need an early warning system.”

Dodd also stressed the need for a fully independent consumer protection agency, as provided in his bill. He noted that the new agency in his bill is to be housed in the Fed only because there’s not sufficient support in the Senate to create an entirely separate agency.

Dodd said his bill provides for the orderly shut down of major institutions through bankruptcy or resolution in ways which will not leave taxpayers paying the bill once again or threaten the U.S. economy as a whole.

One clear guideline he mentioned was the need “to identify unsafe products or practices that could threaten our economic stability and the authority to stop them when the occur.” He specifically promised that his legislation “will bring transparency and accountability to exotic instruments like hedge funds and derivatives that have for far too long lurked in the shadows of our economy.”

To read a summary the “Restoring American Financial Stability Act of 2010,” go to: http://banking.senate.gov/public/_files/FinancialReformSummary231510FINAL.pdf

To read the 1336-page “Restoring American Financial Stability Act of 2010,” go to: http://banking.senate.gov/public/_files/ChairmansMark31510AYO10306_xmlFinancialReformLegislationBill.pdf

For other Agri-Pulse news stories, go to: www.agri-pulse.com

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