Lawmakers team up on financial reform
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Bob Moon:Elsewhere on the Hill, a leading Democrat and a key Republican have agreed to work together on financial reform legislation. And they’re setting aside the idea of a stand-alone Consumer Financial Protection Agency.
Marketplace’s Nancy Marshall Genzer reports the new focus is on things they can agree on.
Nancy Marshall Genzer: They’ve been dubbed “the Dodd couple,” Senator Christopher Dodd, the Democrat who chairs the Senate banking committee, and Republican Bob Corker of Tennessee. They want to hammer out a bill that would prevent another financial crisis.
Douglas Elliott: I’m an optimist about financial reform legislation.
Douglas Elliott is a former investment banker, now at the Brookings Institution. He thinks a bill could pass.
Elliott: And I think it’ll do about two-thirds of what we need it to do.
Elliott says a bipartisan bill could give one government agency — probably the Federal Reserve — the job of keeping tabs on financial risks that could threaten the economy. Elliott says banks could be forced to keep more cash on hand, and the bill could create more transparency in markets for complex financial products. The bipartisan effort has its critics.
Bill Black: All show, no substance.
Bill Black teaches economics at the University of Missouri, Kansas City. He says if the bill doesn’t include a Consumer Financial Protection Agency to police banks and credit card companies…
Black: You’re left with a tutu that kind of, barely, a little bit covers, that nothing’s been done.
Black also doesn’t like the idea of giving the Fed more power. And Douglas Elliott says a stronger Fed could have a hard time popping the next bubble, if it’s making everybody rich.
Elliott: It’s like trying to tell your teenage daughter not to go out with somebody. But you may not be able to make it happen.
Even if you’re the Fed.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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