Financial Reform Moving Ahead

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Wednesday October 07, 2009 · 9:20 AM PDT

2009/10/07 · 09:20

After the biggest banking failure since the Great Depression, new regulations and strengthened oversight of the financial services industry are reportedly now under serious discussion in the House and Senate. In the House, the ledge falls under the purview of the Committee on Financial Services, also known as the Banking Committee, which oversees the Federal Reserve, the Treasury Department, and the Securities and Exchange Commission (The stock and bond markets basically). House Majority Leader Steny Hoyer says he expects a bill to be ready for debate in November. The changes will likely affect everything from stocks and bonds, hedge and mutual funds, to credit cards and home mortgages:

Democratic Representative Barney Frank, chairman of the House Financial Services Committee, has tentatively scheduled a bill-drafting session for October 14-16 for a likely vote on proposals to regulate the over-the-counter (OTC) derivatives market, and on the proposed watchdog, known as the Consumer Financial Protection Agency (CFPA), a House aide said.

Regulation of derivatives is critical. It was the free fall of trillions of dollars in unregulated mortgage derivatives called Credit Default Swaps that turned a garden variety recession into a full on crisis last year, panicking lawmakers and allowing the Bush Administration to inject the better part of one-trillion taxpayer dollars into the nation's troubled banks and insurance companies.

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