The bill was written by the Treasury Department and Chairman of the House Financial Services Committee Barney Frank, D-Mass, The New York Times reported Tuesday. New details emerged as the measure was unveiled, including the definition of "too-big-to-fail," the foggy guideline that regulatory agencies used in the fiscal crisis that developed last fall.
Firms considered so large their failure would sink the financial system were protected by the government with billions of taxpayer dollars. Amid a groundswell of Bronx cheers for bailouts the public saw as helping wealthy bankers, politicians have vowed that the next time around, the cost of a financial clean up would be borne by someone else.
The new legislation defines that someone else as financial companies with at least $10 billion in assets. The bill would create a council of top regulators led by the Treasury Department that would assess and assign contributions from other large firms if one of their brethren behemoths fails.
The bill sets up a powerful council of regulators and gives the Federal Reserve the lead in supervising the country's largest financial firms. In addition, the bill over time would separate commercial companies from the banking industry.
The Federal Deposit Insurance Corp. would have its authority stretched beyond the commercial banking business to allow it to take over a variety of firms entangled with the financial system, such as insurance companies or hedge funds.
The House committee's regulatory agenda is a full one. The committee approved a requirement for hedge funds and private equity funds to register with the Securities and Exchange Commission. Rep. Paul Kanjorski, D-Penn., added offshore funds to the measure to give regulators a 360 degree view of the market, he said.
"There is a common psychology to use the Cayman Islands to hide funds. The whole point of these bills is to get a large enough understanding of the total amount of capital that the systemic risk regulator should be aware of," Kanjorski said.
In market movement Wednesday, the Nikkei 225 in Japan lost 1.35 percent, while the Shanghai composite index fell 1.84 percent. The Hang Seng index in Hong Kong fell 1.84 percent, while the Sensex in India dropped 0.43 percent.
In Australia, the S&P/ASX 200 lost 1.44 percent.
In midday trading in Europe, the FTSE 100 in Britain fell 1.62 percent, while the DAX 30 in Germany fell 1.36 percent. The CAC 40 in France fell 1.41 percent, while the pan-European DJ Stoxx 50 fell 1.14 percent.
Notable deaths of 2014 [PHOTOS]