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House panel to look at financial market reg restructuring
WASHINGTON (6/13/08)--House Financial Services Committee Chairman Barney Frank (D-Mass.) announced Thursday that the committee will conduct a series of hearings to study policy implications of financial market regulatory restructuring. Starting in July, the committee intends to examine the regulatory implications of the rescue of Bear Stearns through the intervention by the Federal Reserve. Throughout the fall, subsequent hearings are being planned to examine, in light of the collapse of Bear Stearns, the ability of the regulatory structure to assess and mitigate systemic risk in order to avoid a similar or more serious crisis in the future, according to a committee release. “As the extraordinary measures utilized to respond to the Bear Sterns crisis demonstrated, we have failed to develop a regulatory system with the reach and capacity to protect the system against the large risks embedded in our increasingly interconnected markets. These hearings are designed to focus on identifying how much reach and what new capacities are needed to avoid – or respond to – the next crisis,” said Frank. Ryan Donovan, vice president of legislative affairs for the Credit Union National Association, said Thursday, "We don't expect any legislative action on this issue in the near term, but will be following all of these hearings closely.” He added, “I think that part of the reason Chairman Frank is going hold these hearings this summer is precisely because there is not enough time to do anything as significant as regulatory restructuring before the end of the year. There is a lot of time for these issues to be studied." The House panel intends to invite the following witnesses: U.S. Treasury Department Secretary Henry Paulson, Federal Reserve Chairman Ben S. Bernanke, New York Federal Reserve President Timothy Geithner, Securities and Exchange Commission Chairman Christopher Cox, other federal regulators, academics, economists. Frank said his committee will also invite witnesses who are “market participants who can address the current state of America’s and other jurisdictions financial regulatory system and can testify on how best to measure and limit risk without stifling innovations and improve market liquidity and breadth.”


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