House debates financial regulation bill
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Kai Ryssdal: If you look back over your calendar, that makes it about a week shy of 15 months since Lehman Brothers left us. And since we crashed headlong into the financial crisis that we are just now working ourselves out of.
There’s been a lot of talk about how the rules needed to change on Wall Street. How we have to make sure nothing like what we have been through could ever happen again. So, how are we doing on that? A bill has been introduced in the Senate. There has been one committee vote in the House. Today, though, the full House began its debate as Marketplace’s Jeremy Hobson reports.
JEREMY HOBSON: With big debates brewing over health care, jobs and war, you’d be forgiven for letting something as wonky as financial regulation slide off your radar screen.
Even Karen Sealy, who works in finance, told us she’s not paying much attention.
KAREN SEALY: I don’t really know like exactly what they’re doing. I just know like bits and pieces of what they’re doing, but not a whole lot about it.
Well, here’s the abbreviated version. The House bill would finally regulate derivatives, which played a big part in bringing the financial system to its knees. It would start a new agency to look out for the consumer. It would set up a council to watch over companies that can pose a risk to the entire economy. And it would create a $150-billion fund in case a firm fails.
Many here on Wall Street oppose the bill. And so do Republicans, like Congressman Pete Sessions of Texas.
PETE SESSIONS: Our Democrat colleagues are using the policy and regulation to force a government takeover of the free enterprise system.
Sessions argued the regulatory bill will add to the deficit. That prompted this retort from Congressman John Dingell, a Democrat from Michigan.
JOHN DINGELL: Yes, we’re having to spend money. And we’re having to spend money because of mismanagement and because of outright rascality up in New York.
Many economists argue Congress had better act fast.
Thomas Cooley is the dean of NYU’s Stern School of Business. He says the financial crisis will slip from our collective memory as the economy improves.
THOMAS COOLEY: And if we don’t do something about sources of systemic risk in the system, then all we are doing is setting the table for the next financial crisis.
The House is expected to vote on the bill tomorrow. The Senate won’t take up the issue until next year.
In New York, I’m Jeremy Hobson for Marketplace.