Added by Gary Dunn on September 30, 2010
Ben Bernanke, Chairman of the Federal Reserve and other important U.S. regulators said on Wednesday that they will work united to implement the Dodd-Frank Act.
The Democratic lawmakers, Dodd and Frank, spearheaded the extensively deliberated reform act to mend the gaps in financial regulations exposed by the U.S. housing law troubles in 2007.
As reported by Reuters, the Federal Deposit Insurance Corp Chairman, Sheila Bair said that “It is imperative that regulators work together, with both speed and openness in the implementation of the Dodd-Frank Act in order to dispel uncertainties and foster a smooth transition by the industry”.
The act was included in law two months ago. Since then it was the first testimony by the regulators in front of the Senate Banking Committee in which they vowed to work in cooperation to implement the mammoth task of overhauling financial regulations.
This would require the Federal Reserve and other regulatory agencies to coordinate among themselves to write 50 sets of rules and guidelines, several reports and many of them within a short span of time. According to Bair, this would involve a fundamental change in the way large financial institutions are regulated.
The regulators would be required to identify financial troubles and provide ways to shut down troubled firms safely without costly bailouts. The new reforms provide that no firm would be “too big to fail”. Companies need to take responsibility of careless financial dealings and realize that this could result in lower shareholder value and redundancy of senior managers.
However, some Republicans are divided on this policy and said that they would consider not implementing some of the measures if they came into power after the November elections.