Bank bill in peril, WH urges part be dropped

Source: Associated Press

WASHINGTON — In the face of stiff GOP opposition, Obama administration officials want Senate Democrats to purge a $50 billion fund for dismantling "too big to fail" banks from legislation that aims to protect against a new financial crisis. Republicans contend the provision would simply continue government bailouts of Wall Street.

The sweeping bill aims to prevent a recurrence of the crisis that nearly caused a Wall Street meltdown in 2008. Beside creating a mechanism for liquidating large firms, House and Senate bills would govern previously unregulated derivatives, create a council to detect systemwide financial threats and establish a consumer protection agency to police lending, credit cards and other bank-customer transactions.

President Barack Obama declared on Friday that he would veto the bill if it doesn't regulate the freewheeling derivatives market. "We can't afford another AIG," the president said, referring to the giant insurance conglomerate that relied heavily on the complex, sometimes exotic investment instruments.

Separately on Friday, the government accused Goldman Sachs & Co., Wall Street's most powerful firm, of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was collapsing two years ago.

One senior Treasury official said on Friday that the fund for dismantling giant failing banks, which would be financed by large financial institutions themselves, is unnecessary. He said the costs of dismantling the firms could be recouped from the industry after a liquidation.

If the chairman of the Senate Banking Committee, Christopher Dodd, D-Conn., complies, that would remove one component of the bill that Republicans have persistently used to rally opposition. But it was unclear whether that step alone would yield any Republican votes.

Read more: http://www.google.com/hostednews/ap/article/ALeqM5i4uCqEf5jQUUFh6gvxGr2V4dEAlgD9F4ETRG2

It is well-known that before he got all rabid on this bill, Mitch McConnell was meeting with Wall Street not-so-worthies, en masse, and presumably blowing them until they bled.

The fund opposition is a ruse. Wall Street wants no new regulations, or any regulations, on hedge funds. It is where they make their best mischief. "$50 Billion" is simply a point trumpeted so the opposition to the bill resonates with the cognitively depraved amongst us.

What the Republicans really want to do is keep derivatives unregulated.

The health care process should have made it clear that there's no point in trying to compromise with these jackals. They'll never vote for bank reform, no matter how watered down it becomes.

Umm we just went through this on healthcare. No matter what the Democrats do, it will never be watered down enough for a single GOP vote. Force them to do a real filibuster and then when they give up, pass the freaking thing and get on to the next topic.

and noones noticing that the administration is trying to be bi-partison.... trust me..

people in the middle(or not fond of politics) who it mite sway arent really paying much attention to things right now if you ask me.

Except that the administration is on record opposing measures such as a financial transactions and a Tobin tax that are designed to do just that....

Just give them a key and an I.D. card to Fort Knox along with a fleet of dump trucks to haul the money away with.

in case of their own demise, we'll be on the hook again. The Republicans are going to accomplish exactly what they claim to be fighting. Someone explain the FDIC to them.

Anyone see the show about so-called "health care reform" on PBS? If not, check the listings for "Obama's Deal."