posted by GeoT
WASHINGTON, Oct 23 (Reuters) – The Obama administration plans to unveil on Monday a new plan for dealing with troubled financial giants, said a senior U.S. lawmaker, who also mentioned potentially big changes for the insurance industry.Barney Frank, chairman of the House Financial Services Committee and a chief architect of the financial regulation overhaul, declined on Friday to give details on the administration’s new bill, which would give the government the power to dismantle large financial companies that get into crises.
The new draft bill is expected to take a tougher stance toward troubled financial firms than the administration’s original plan, and may take out some language that would allow for temporary bailouts.
Giving the government “resolution authority” would serve as a rebuttal to the concept that some firms are too big to fail. Federal Reserve Chairman Ben Bernanke on Friday highlighted the need for this authority as well as other measures to reduce the likelihood that one firm could destabilize the financial system.
Frank also said Congress is discussing whether to create an optional federal charter for insurers.Insurance companies are currently regulated by the states.
“If we do get into national chartering it will be in life insurance … and maybe large commercial entities,” Frank said during remarks to a banking symposium.
He said lawmakers would not likely try to federally regulate property and casualty insurers, however.