• By
  • Damian Paletta

House Financial Services Committee Chairman Barney Frank (D., Mass.) held a press conference Tuesday on efforts to overhaul financial regulation. Some key points:

1)       A vote on the House floor isn’t expected until early December, at the earliest.

2)       He supports making Harvard Law School Professor Elizabeth Warren the first director of the Consumer Financial Protection Agency.

3)       He supports an amendment by Rep. Ed Perlmutter (D., Colo.) that would allow regulators on a case by case basis to reinstall Glass-Steagall rules preventing specific institutions from operating both a commercial bank and an investment bank if it poses a systemic risk.

4)       He supports an amendment by Rep. Paul Kanjorski (D., Pa.) making more explicit that regulators will have the ability to limit a specific company’s size and complexity over concerns about safety and soundness.

5)       He said it would be impossible to legislate a repeal of the Gramm-Leach-Bliley Act.

6)       His legislation would direct institutions with more than $10 billion of assets to pay into a fund that could be used later to dissolve of a faltering large, complex financial company. This fund would be large, but not in the “hundreds of billions” of dollars. If the fund runs out because of an emergency and more money is needed, Congress would have to be involved before any money is appropriated by Treasury, he said.

7)       He is working on a deal that would allow the government to offer assistance to companies that are still solvent but need aid. This could likely be in the form of an emergency liquidity facility from the Federal Reserve. The Fed would be able to lend money to a facility but not specific institutions.



for economic news and analysis
for central banking news and analysis

Get WSJ economic analysis delivered to your inbox:


Sign up for the Real Time Economics daily summary