By not including what Obama calls the Volcker rule in last summer's financial regulation plan, Obama made extra work for Barney Frank. But Barney is being a doo-bee and is playing nice:
Frank says Obama bank plan could be law within months: The chair of the House of Representatives financial services committee, and a lynchpin of US President Barack Obama’s attempts to rein in the banking sector, has argued that the dramatic proposals unveiled by the administration last week to clamp down on banks could be incorporated into legislation already planned by his committee, and thus could be enacted into law within months.
In an exclusive video interview with the Financial Times, Congressman Barney Frank admitted that he had been surprised by the timing of Obama administration’s move last week - but insisted that the policy detail of the proposals, drafted by Paul Volcker, chairman of President Obama’s Economic Recovery Advisory Board, were in line with the committee’s existing thinking.
“We’ve been working with Paul for most of the [last] year, so I wasn’t surprised [by the details of the proposals],” he says. Mr Volcker, previously seen as an “odd man out” had now been recognised by the administration for the “cogency of his work”, Mr Frank said.
Last week Mr Obama and Mr Volcker announced twin proposals – one to constrain the biggest banks from growing bigger, and another to force them to shed hedge fund, private equity and proprietary trading activities. The initiative was dubbed Glass-Steagall Lite by some commentators, who saw in it a slimmed down version of the 1930s legislation that forced commercial and investment banks to split.
Mr Frank said one caveat for his support was that banks must be given sufficient time – “at least three years” – to divest hedge fund and private equity assets, or trim their size.. “You can’t have a firesale. There would have to be a phase-in,” he said...