Legislators and policymakers alike are reacting to the Senate’s move on Thursday to approve the most sweeping rewrite of financial regulation since the Great Depression, legislation designed to shield the economy from repeating the crisis that since 2008 has left more than 8 million Americans jobless.
The bill passed by a vote of 59-39, with four Republicans joining Democrats in support of the measure. The legislation must now be merged with a similar version of the bill passed by the House in December. Lawmakers are aiming to deliver a final product to the president’s desk by the July 4 holiday.
Once President Obama signs the measure, the legislation would:
Establish a “financial stability oversight council” to monitor risk in the financial system.
Create a consumer-protection division within the Federal Reserve to monitor mortgage, auto and credit card lending.
Provide regulators with new powers to regulate derivatives by requiring the complex financial instruments to be traded or cleared through exchanges.
- Grant the government, through the Federal Deposit Insurance Corporation, authority to wind down failing financial institutions.
The bill leaves Wall Street bracing for “seismic changes,” reports The Wall Street Journal:
“The Senate version of financial regulation hits Wall Street harder than expected, with some analysts estimating it could cut the profits of major financial institutions by roughly 20%.”
Investors will be watching to see how the bill plays on Wall Street on Friday following yesterday’s market correction. All three major U.S. indexes fell sharply. The Dow led the sell-off, plunging 376 points. Stock futures this morning point to a seventh straight day of losses following declines in both Asia and Europe.
Director of National Intelligence to Resign
The nation’s chief intelligence director, Dennis C. Blair, is set to formally resign Friday after a shaky 16-month tenure in which the U.S. failed to detect terrorist plots such as the recent attempted bombing of New York’s Times Square.
“It is with deep regret that I informed the president today that I will step down as director of national intelligence effective Friday, May 28th,” Blair, a retired admiral, said in a statement.
His departure, says The Washington Post, “is likely to renew debate over whether the DNI position, a daunting job created amid sweeping intelligence reforms after the Sept. 11, 2001, attacks, is fundamentally flawed.”
Clinton Condemns North Korea
Secretary of State Hillary Clinton has condemned North Korea for a torpedo attack against a South Korean naval ship that killed 46 sailors in March.
“I think it is important to send a clear message to North Korea that provocative actions have consequences,” Clinton said following a meeting with her Japanese counterpart in Tokyo. “We cannot allow this attack on South Korea to go unanswered by the international community.”
Calm Returns to Thailand
Thailand’s Prime Minister, Abhisit Vejjajiva, says calm has returned to the Thai capital of Bangkok following a week of clashes that left more than 50 people dead. Abhisit said Thai officials would move to “restore normalcy” throughout the country and called for reconciliation with the anti-government red shirt protesters.
“We can certainly repair damaged infrastructure and buildings, but the important thing is to heal the emotional wounds and restore unity among the Thai people,” he said during a televised address.