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

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.
MAY 08, 2009
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.

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