Restore credibility to the U.S. financial system
Legislation passed out of the Senate Banking Committee seeks sweeping reform of the U.S. financial system. Proposed changes would end the flagrant abuses and scams that cost taxpayers hundreds of billions of dollars in bailout payments and billions more in lost personal savings.
THE health and credibility of the U.S. financial system is basic to the functioning of the American economy, and the role and influence of that economy worldwide.
A comprehensive package of financial regulatory reforms voted out of the Senate Banking Committee is fundamental to restoring that credibility and rebuilding the strength of the economy.
The bill now before the full Senate moves the country one step closer, in the words of President Obama, "to passing real financial reform that will bring oversight and accountability to our financial system."
The legislation is expansive because the Great Recession almost brought the system down and provided a raw, painful lesson that existing laws had not kept pace with the creative byproducts of greed, hubris and sense of entitlement in the financial world.
No one was looking out for ordinary Americans, but they got the bill when collapse seemed inevitable.
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, has set out a bill with a key remedial step: creation of a consumer protection agency. American consumers suffered for lack of trustworthy information about a variety of financial products.
The legislation would end "too big to fail" by imposing new capital and leverage requirements on financial firms. The bill also seeks to regulate and generally tighten rules on the most exotic investments.
Transparency and accountability are words that get heavy use, whether the topic is investments or the practices of credit-rating agencies. Too much of the economy operated out of sight and in the shadows, until things went bad, and financial firms needed lucrative bailouts.
One sadly novel recommendation in the legislation is to enforce laws already on the books. Regulators were willfully distracted and indifferent for almost two decades.
Republicans have been caught up in their own internecine politics. Many recognize the desperate need for reforms, but the GOP is mired in blind opposition, apparently comfortable with being the party of "no" at any cost, even to their own constituents.
Curious politics considering the basic need to overhaul and reform a broken financial system.