Obama financial reforms advance in Congress

[ProSense]

Obama financial reforms advance in Congress

By Kevin Drawbaugh Kevin Drawbaugh – 1 hr 6 mins ago

WASHINGTON (Reuters) – The Obama administration made gains on Tuesday in its push for U.S. financial reform, unveiling a landmark bill to tackle systemic risk in the economy and winning congressional committee approval for a measure to expose hedge funds to more government scrutiny.

The systemic risk bill would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the Federal Deposit Insurance Corp to monitor and address risks to economic stability posed by shaky financial holding companies.

Those deemed severely undercapitalized by the council could be restructured or even shut down by regulators. Managers could be dismissed, credit exposures limited, pay and bonuses restricted, acquisitions and new ventures blocked.

In a measure meant to reverse decades of weakened oversight of Wall Street and the banks, the bill aggressively asserts government power to prevent bailouts like last year's rescues of AIG, Citigroup and Bank of America.

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Obama embraces House financial overhaul bill

By ANNE FLAHERTY, Associated Press Writer

WASHINGTON – President Barack Obama on Tuesday embraced a House bill that would give the government unprecedented power to seize bank holding companies and other large financial firms teetering on the brink of collapse and stick their competitors with the cost.

In a letter to House Financial Services Committee Chairman Barney Frank, Obama said the belief among financial executives that the government would ultimately protect them creates a "perverse incentive" for large firms to take reckless risks.

"Taxpayers simply must not be put in the position of paying for losses incurred by private institutions," Obama wrote in the letter, obtained by The Associated Press.

Under Frank's proposal, a council of regulators would be established to monitor financial firms regarded as so big and influential that their collapse could bring down the entire economy.

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[ProSense]

1. No comment? n/t

[HopeOverFear]

2. be patient, Pro. the naysayers need time to twist this news into something negative

don't worry, they'll be along soon enough.

[annabanana]

4. Kick this during office hours... You should get some feedback.

It all looks good to me.

BUT . . The big boys are scared and framing this as nothing less than a totalitarian takeover. . That view will get LOTS of airtime. (The media blast might give CNBC & the teabaggers common cause)

[ProSense]

6. Thanks. n/t

[Kdillard]

3. Excellent news.

[vaberella]

5. Woohoo... I like the fact Harry Markopolos' words are given this kind of consideration. n/t