Bill in works to let U.S. dissolve failing firms

Intent is to avoid bailouts 'No taxpayer money' would be spent

By David Cho, Brady Dennis and Neil Irwin
Washington Post Staff Writer
Tuesday, October 27, 2009

House Democrats and the Obama administration are preparing to introduce major legislation aimed at eliminating the devil's choice the government faced last fall, when officials felt forced to decide between spending billions of dollars to rescue some of the nation's most powerful financial firms or letting their failures sink the economy.

The lawmakers and Treasury Department officials labored over the weekend to finish drafting legislation that would empower the government to seize troubled firms other than banks that are deemed "too big to fail." The legislation would set up the Federal Reserve to oversee the largest financial firms, and eliminate the agency that regulates thrifts. The officials said the measure could be unveiled as soon as Tuesday.

The proposal comes as debate intensifies over how far the government should go in restructuring the financial system, and it follows House action last week toward creating a consumer protection agency to oversee lending practices. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, is shepherding the effort, in close coordination with Treasury.

Officials at Treasury and the Fed have pushed for "resolution authority" over non-bank financial firms for months, viewing it as one of the most important tools for dealing with future crises.

(More here.)

You have read this article with the title Bill in works to let U.S. dissolve failing firms. You can bookmark this page URL https://ogbcommunity.blogspot.com/2009/10/bill-in-works-to-let-us-dissolve.html. Thanks!