House Panel Approves Measure to Dismantle Risky Firms

[ProSense]

Panel: US can dismantle 'too big to fail' firms

By JIM KUHNHENN, Associated Press Writer

WASHINGTON – A House committee voted Wednesday to give the government the right to dismantle financial firms that are so big, interconnected and leveraged that they could harm the economy, even if they are healthy.

Voting along party lines, the House Financial Services Committee modified a sweeping financial regulation bill to give broad new power to a proposed Financial Services Oversight Council that would monitor risk across the financial system.

The provision, proposed by Rep. Paul Kanjorski, D-Pa., was staunchly opposed by Wall Street because it would let the government break apart firms even if they were sound and well-capitalized.

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The amendment approved Wednesday says the government could intervene when a firm presents a "grave threat" to the financial system — a higher bar than what many large financial institutions thought Kanjorski would set.

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House Panel Approves Measure to Dismantle Risky Firms

The House Financial Services Committee voted 38-29 today on an amendment that would let regulators dismantle a firm, limit mergers and acquisitions and force an end to activities deemed systemically risky. The financial industry opposed the measure, which is part of legislation to overhaul Wall Street rules

[Kdillard]

1. good news. Hopefully things will get moving on the Senate side.