By Rob Nichols. Fox Business Network
Transcript

7:11 AM

Rich: Good morning Alexis. Treasury Secretary Tim Geithner will push that super regulator, a systemic risk regulator to look across the financial system to prevent firms from growing too interconnected. Basically to avoid the next AIG. The treasury secretary will strongly urge congress to quickly pass financial reforms. In his prepared remarks, Geithner says “time is the enemy of reform as some normalcy returns to our financial system and our economy; we cannot let it be cause for complacency.” But congress still has to get through healthcare and lawmakers and industry reps have concerns over some of the provisions like new capital standards and the proposed consumer financial product agency.

Rob Nichols: We are in heated agreement with this administration that we need to have world class consumer protections, and again, that's one of the reasons we have the premier capital market in the United States. So we cannot undermine those consumer protections in any way. It is just a matter of getting the balance right and not doing something that might have unintended long-lasting negative consequences.

Rich: Industry reps and conservative lawmakers say a new independent agency would have too much power to restrict financial products and charge firms fees. Consumer advocates say that authority is needed. House Financial Services Chairman Barney frank is offering a compromise. He’s proposing to exclude many non banks, like lawyers, telecom companies, and car dealers from the reach of this new agency. He’s proposing to remove a provision requiring firms to offer customers plain vanilla financial products. And he's changing the structure of the proposed agency to include an oversight board including bank regulators.

8:27 AM

Rich: Treasury Secretary Tim Geithner wants Congress to OK his overhaul and do so quickly. He will warn Congress that time is the enemy of reform and he will ask lawmakers to approve a new independent consumer regulator. Resolution authority for the federal government and create that systemic super regulator. In his prepared remarks Geithner says we cannot permit our largest investment banks or other firms to operate without real consolidated supervision yet obtained government assistance when they collapse. We will impose tough rules on our largest, most leveraged and most interconnected firms. Geithner wants that job to go to the fed and many in the financial-services industry agree.

Rob Nichols: They have been looking at the complex financial institutions; we think they should continue in that role. Should there be another crisis like we saw, to make a comparison to a fire department, they have the trucks and hoses if they ever needed to fight the crisis, we think they're the right entity to do so.

Rich: Industry reps and conservative lawmakers have been at odds over consumer advocates over the consumer financial products agency. House Financial Services Chair Barney frank is offering a compromise. He is proposing to exclude many non banks like lawyers, telecom companies and others from the reach of the new agency, he is proposing to ask firms to offer customers plain vanilla financial products and changing the structure of the proposed agency to include an oversight board including bank regulators. The hearing begins in about an hour.

9:20 AM

Rich: Good morning Alexis and Geithner wants to bring Reg reform back on stage and wants congress to pass the key components of his proposal. Systemic risk regulator and a strong independent consumer authority for financial products and he wants that done quickly. In his prepared remarks, Geithner says time is the enemy of reform, as some normalcy returns to our financial system and our economy; we cannot let it be for complacency. Debate is ongoing over debate is ongoing over proposed reform, lawmakers, consumer advocates and industry groups heavily involved.

Rob Nichols: Should a large institution fail you can do so in a non chaotic way that won't cause harm to the capitol market. Some say that we don't need the series of protocols and legal enhancement and that it can simply take place under the current bankruptcy code. That is another area of very consistent conversation.

Rich: Now, House Financial Services chairman Barney Frank will work on Reg reform in stages. First up, an independent consumer agency for financial products. Frank is offing a compromise version that would exempt non banks like lawyers, real estate brokers and accountants from supervision by the new regulator. The Geithner hearing begins in about ten minutes. Later this afternoon, other federal regulators, Sheila Bair will testify on Reg reform before the same panel, Alexis, back to you.