FACTBOX-Key comments on US financial regulation

Posted on Reuters.com.  Click here to view original article.

Wed Apr 14, 2010 5:36pm BST
Compiled by Tabassum Zakaria; Editing by David Storey


U.S. President Barack Obama met with congressional leaders on Wednesday to press for overhauling financial regulation.

The Senate is moving closer to a decision on a bill that could reshape the financial services industry for years to come, with a final vote expected within weeks.

It is a contentious issue for Democrats and Republicans, who fought bitterly before Obama's healthcare reforms were passed in March and who are expected to clash on many other issues in the run-up to congressional elections in November.

The following are some comments from key players:

PRESIDENT BARACK OBAMA

"I think all of us recognize that we cannot have a circumstance in which the meltdown of the financial sector once again puts the entire economy in peril."

"If there is one lesson that we've learned it's that an unfettered market where people are taking huge risks and expecting taxpayers to bail out when things go sour is simply not acceptable."

"As a consequence, I'm actually confident that we can work out an effective, bipartisan package that assures that we never have too big to fail again, that consumers are adequately protected... that we have a strong mechanism to regulate derivatives."

SENATE BANKING COMMITTEE CHAIRMAN CHRISTOPHER DODD

The Democrat is a chief writer of new financial rules and he accused Republicans of falsely characterizing financial reform efforts as a permanent bailout.

"No matter what is proposed, no matter what's in the bill, no matter what protections it includes, call it a bailout. It's a naked political strategy, and if it succeeds, and this legislation goes down, and another crisis sinks the American economy, then the next recession and all of the damage it will bring to middle class families will have happened for the sake of that false talking point."

SENATOR RICHARD SHELBY, BANKING COMMITTEE'S TOP REPUBLICAN

"If Democrats are going to try to push the Dodd bill as it's now written we're going to oppose it for a lot of reasons, but No. 1 it basically lets the status quo remain as far as "too big to fail"," he said on CNBC Television.

"We've got to send the signal to banks, to industry that if you fail, we're going to wind you up and move on. We should not visit the taxpayers again like we did 18 months ago."

"Whether it gets passed I think will depend on whether or not the Democrats and Republicans can work on a substantive, bipartisan bill which Senator Dodd and I continue to talk and try to work on. If we can do this, I think between now and May or early June. If we're not able to do this, I'm not sure it will pass at all."

JPMORGAN CHASE CHIEF EXECUTIVE JAMIE DIMON

On Obama's proposed bailout fee on big banks.

"Let's not call it a bank fee," he said. "Let's call it what it is, which is a punitive bank tax."

On how OTC derivatives reform would affect the bank:

"The devil's in the details here, and when we oversimplify, we're not doing justice to the issue. We do believe that most standardized (derivatives) will go to clearinghouse, and that's fine. That in and of itself does not have a huge impact on revenues."

"Then there's the issue about how much of those and other trades go through an exchange... that could or couldn't (have a big impact on revenues), depending on how it's designed, and how much room is left to have exceptions to over the counter or end-user exceptions, that's not defined yet. So it'll be a negative, and depending on the real detail, it could be several hundred million dollars to a couple billion dollars."