Vast regulatory reform bill will be law by yearend, Barney Frank says

Systemic-risk regulator would have sweeping powers to regulate financial activity

By Sue Asci

May 8, 2009 @ 1:43 pm (Updated 1:45 pm) EST

President Obama will likely sign comprehensive financial services regulatory reform legislation into law by yearend, House Financial Services Committee Chairman Barney Frank, D.-Mass., said today at the Financial Industry Regulatory Authority Inc.’s annual meeting in Boston.

“We plan to start voting on this by the end of June,” he told participants.

The proposed legislation will create a systemic-risk regulator and a “resolving authority,” which would have the ability to dissolve non-bank institutions, Mr. Frank said.

“The systemic-risk regulator will not displace or diminish the role of Finra, the Securities and Exchange Commission or bank regulators,” he said.

“They will have the ability to step in and cover any financial activities. They will work in conjunction with the existing regulatory structure. They will have the ability to regulate activity and to reduce leverage,” Mr. Frank said.

Reform of securities regulation will “enhance the ability of the various securities regulators to do what they do,” he said.

A third piece of the reform involves executive compensation.

“We will not set dollar limits,” Mr. Frank said. “We will push harder for a say-on-pay vote of the shareholders on executive pay packages.”

Mr. Frank also said that he expects Congress to give the SEC authority over hedge funds and require these funds to register.

When asked about the likelihood that Congress will create a federal insurance regulator, he said, “It’s got a 50-50 chance.”

“I think there is a much stronger chance for an optional federal charter for life insurance,” Mr. Frank said.

“The chance of property and casualty insurance being done federally are very small,” he said. “Property and casualty are local.”

Finra is based in New York and Washington.

  @IN Wire

Jul 24 09:15AM
You already know! RT @voxdotcom: Herbalife may not be a Ponzi scheme. But its science is definitely garbage. http://t.co/LKEOME6cEH
Jul 24 09:09AM
Monthly: dollar cost avging! RT @mandiwoodruff: Should you make a lump sum IRA investment or monthly contributions? http://t.co/RKWDDESQWW

Career Center

Explore your opportunities and be informed for your next move.

Company Type
Firm Type
Clearing Firm
Presented by