Before putting any bill to a committee vote, Chairman of the Senate Banking Committee Christopher Dodd, D-Conn., and Republican linchpin Bob Corker, R-Tenn., have been selling an agreement hammered out in private meetings -- part of Dodd's strategy of doling out major parts of the reform proposals to pairs of senators on the committee for private negotiations.
The senators are now trying to sell a proposal to their colleagues that includes formation of a consumer protection division within the Federal Reserve, rather than as a stand-alone Consumer Financial Protection Agency that President Barack Obama favors.
The division would have some independent clout, as it would be headed by a presidential appointee and write regulations on its own -- regulations it would have the power to enforce, The Wall Street Journal reported Tuesday. It would also have its own budget.
If the proposal survives the political process -- a straw vote in the hallways of the Senate, a banking committee vote, confirmation by senators, a joint discussion with the House and presidential approval -- it remains to be seen whether such a division would end up with the tail wagging the dog at the Fed, which has traditionally focused on protecting banks, not consumers.
In a second critical pairing in the reform discussions, Corker and Sen. Mark Warner, D-Va., have agreed to a process by which the government can take control of dangerously large financial firms where a failure would ripple through the financial system.
Essentially, the compromise entails a new bankruptcy process that starts with the Fed's board of governors, a seven-member panel, agreeing a firm of consequential size needs to be unwound. The process, currently unavailable to the government except in the case of banks regulated by the Federal Deposit Insurance Corp., would then rely on the FDIC to remove the firm's management, if necessary, and liquidate its assets.
For the federal government, the process establishes an option for dealing with huge financial firms besides watching them fail in chaos or turning to the taxpayers for bailout funds. With the new liquidation process, shareholders would be wiped out in most cases, the Journal reported.
On Monday, European Union commissioner for monetary affairs Olli Rehn urged Greece to take further steps to control its debt through spending cuts or higher taxes while holding off on details of how EU members would assist the debt-burdened country.
"Either you control your debt, or your debt will control your economy," The New York Times quoted Rehn as saying.
"This is a crucial moment for your country. Do not take these measures to please Brussels or other European partners but for the future of your country, for your schools and hospitals," he said.
In international markets Tuesday, the Nikkei 225 index in Japan rose 0.49 percent, while the Shanghai composite index in China fell 0.48 percent. The Hang Seng index in Hong Kong lost 0.72 percent, while the Sensex in India rose 2.09 percent.
The S&P/ASX 200 in Australia rose 0.33 percent.
In midday trading in Europe, the FTSE 100 in Britain rose 0.82 percent, while the DAX 30 in Germany added 0.74 percent. The CAC 40 in France rose 0.8 percent, while the pan-European DJ Stoxx 50 rose 0.49 percent.
Bombing IS Is hardly enough
Ouch, the bill for ObamaCare coming due