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| Frank Calls for Regulative Oversight in Bear Stearns Wake WASHINGTON -- Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, is calling for tougher and broader regulations of the financial system after the fall of the investment bank Bear Stearns, according to the Associated Press. Frank wants to give either the Federal Reserve or a new regulator the power to oversee the activities of major financial players, regardless of whether they are a bank, securities firm or hedge fund, the AP reported. Mr. Frank, who made the proposal Thursday in a speech to a business group in Boston, also suggested that investment banks be required to hold cushions against losses, a mandate that currently applies only to commercial banks, the AP reported. The concept, if enacted, could reshuffle the existing landscape of financial regulators, whose duties are split among several federal agencies, including divisions of the Treasury Department, the Fed and the Securities and Exchange Commission, according to the AP. Some lawmakers fear that the bargain-basement sale of Bear Stearns to JPMorgan Chase, engineered by the Federal Reserve and Treasury Department, opens the door to more government efforts to aid troubled financial players, ultimately putting taxpayers at risk. The Fed, which is providing $30 billion in backing for that deal, could wind up turning a profit, but its payments to the Treasury could be diminished if the investments it is backing do not pay off, according to AP reports. -- NYSSCPA.org News Staff Posted on 3/21/08 |
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