WASHINGTON, Sept. 30 (UPI) -- Federal Reserve Chairman Ben Bernanke and other regulators told the U.S. Congress they are making progress on implementing financial reform.
Appearing at Thursday's Senate Banking Committee's hearing, Bernanke read from prepared remarks, "The Dodd-Frank Act is an important step forward for financial regulation in the United States and it is essential that the act be carried out expeditiously and effectively."
Enacted in July, the law strengthened the government's oversight of financial system and consumer protection to prevent another financial meltdown.
The Fed has the task of writing and implementing 50 new rules and responsibilities, including the supervision of designated non-bank financial firms and applying stronger standards for internationally active banking firms.
Congress left much of the substance of the rules to the discretion of regulators.
Bernanke said the Fed has made a "substantial progress" with Basel III accord, an international banking supervision aiming to constrain bank risk-taking and improve capital quality.
"It was encouraging to see the regulators understand the enormity of the task and implementation of the law," said Mike Konczal, a fellow at the Roosevelt Institute. "There's a lot of potential for lobbying to prevent them (regulators) from making solid rules on the financial markets."
Bernanke stressed that the Fed is working closely with other agencies to implement the sweeping revisions in policy brought about by the new law.
"It is essential that the (overhaul law) be carried out expeditiously and effectively," he said.
Commodity Futures Trading Commission Chairman Gary Gensler said his agency has worked to set a "rigorous clearinghouse system" to improve transparency with the over-the-counter derivative market.
Securities Exchange Commission Chairwoman Mary Schapiro emphasized the coordination with other agencies such as CFCT in rulemaking in derivatives and mortgage-backed securities, presenting a united front on the collaboration needed to pull off the massive undertaking ahead of the various governmental agencies.
But the regulators also talked about the need for autonomy in overseeing their areas of responsibility. Bernanke said independence "is very important for a lot of good reasons," such as providing "multiple sets of eyes."
Federal Deposit Insurance Corporation Chairwoman Sheila Bair discussed the resolution's authority to be put in practice. Under the overhaul law, FDIC has a power to take over a failing financial company such as Lehman Brothers Holdings Inc., and liquidate the business and resolve the liabilities in order to end the taxpayer-funded bailouts.
Lawmakers also raised questions about legal authority of the Financial Stability Oversight Council, a powerful new group created under the reform law that's responsible for monitoring financial risks and promoting market discipline. Headed by Treasury Secretary Timothy Geithner, the council is to have its first meeting Friday.
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