After the financial upheaval this country has endured in the last several years, financial reform may be on the horizon. The Senate has passed a financial regulation bill with a 59-39 vote. The bill must now be reconciled with the bill the House passed in December and could be on President Obama’s desk as early as the 4th of July.
Heeding to the public anger, the Senate and the House meet they will likely be tougher on banks as “Unemployment still hovers around 10 percent, big banks have declared significant if not record profits, and Goldman Sachs is fighting off accusations of fraud from the Securities and Exchange Commission.”
Early Thursday, President Obama stated, “Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years,” The legislation aims to do the following:
- prevent a recurrence of the near-meltdown of big Wall Street investment banks and the resulting costly bailouts
- call for new ways to watch for risks in the financial system
- make it easier to liquidate large failing financial firms
- write new rules for complex securities blamed for helping precipitate the 2008 economic crisis
- create a new consumer protection agency
- impose new restraints on the largest, most interconnected banks
- demand proof that borrowers could pay for the simplest of mortgages
- give shareholders the right to cast nonbinding votes on executive pay packages
- give Fed ability to set standards on excessive compensation that would be deemed an unsafe and unsound practice for the bank
Senate Majority Leader Harry Reid, D-Nev said, “To Wall Street, it says: No longer can you recklessly gamble away other people’s money. It says the days of too big to fail are behind us. It says to those who game the system: The game is over.”
About Libby Juliá-Vázquez