Breaking News, World News and Taiwan News.

Updated Thursday, March 18, 2010 10:12 am TWN, By Kevin Drawbaugh and Karey Wutkowski, Reuters

Sponsors
▪	Get the best deals for Guangzhou Hotels or choose from more than 10,000 hotels in 499 Chinese cities.
▪	Find great real time deals on China Flights. Book flights to China or China domestic flights 24/7.
▪	Buy china wholesale products from reliable chinese wholesalers on DHgate.com!
▪	Save 75% for all hotels in Shanghai, Beijing and whole China. Lowest rates for Flights in China.

U.S. Senate committee seen approving financial reform

On Tuesday, almost two years since the near-collapse of former Wall Street giant Bear Stearns ushered in the worst financial crisis in generations, Republicans were pushing Dodd to put the brakes on the banking committee's timetable.

A one-week deadline for committee passage is “way too quick,” said Republican Senator Bob Corker, who had tried but failed for weeks to reach a bipartisan deal with Dodd.

Corker was optimistic, however, about chances of Congress approving a reform bill this year. “The odds are very high, and I think there are people on both sides of the aisle that actually want to see a bipartisan bill,” he said on CNBC.

The bill unveiled on Monday serves as a placeholder, Dodd told CNBC, noting that a proposed government watchdog for financial consumer products and increased shareholder rights are two issues “still in controversy.”

The bill repeats language first proposed by Dodd in November to crack down on the US$450-trillion over-the-counter derivatives market. Risky derivatives instruments such as credit default swaps, a type of insurance used by bondholders, have been blamed for helping to cause the financial crisis.

A compromise proposal being worked on by two other senators, Democrat Jack Reed and Republican Judd Gregg, is expected eventually to replace what is in the bill now.

Treasury Secretary Timothy Geithner said on Fox Business Network on Tuesday that he supports changing Federal Reserve governance to eliminate any perception of undue influence by banks. Dodd has proposed making the president of the New York Federal Reserve a presidential appointee.

The New York Fed acts as the U.S. central bank's arm on Wall Street, implementing monetary policy and regulating most of the biggest U.S. banks. Its president is currently chosen by a nine-member board of directors that includes heads of banks it regulates.

Dodd also proposes enforcing the “Volcker rule” — first introduced by Obama early this year and named after White House economic adviser Paul Volcker — that would curb proprietary trading at banks and force them out of the hedge fund business. No rule, however, could be imposed until a study is done by a proposed council to oversee systemic financial risk.

“This seems like it is less than a total ban and it is a point that will need to be clarified before the committee votes,” said Jaret Seiberg, an analyst at Concept Capital.

The bill also calls for stricter bank capital and liquidity standards, but they are not clearly defined. The details will depend on the efforts of international banking supervisors tasked with developing new standards.

Both Democrats and Republicans seem to agree on other issues, such as forming the new systemic risk council and putting in place a new process for dealing with large financial firms that get into trouble.

1|2