Feared by some and long-awaited by others, a plan to reform and regulate the United States financial industry has been unveiled today by top Senate Democrats.
In response to the most severe recession since the Great Depression, which was precipitated by Wall Street banks and investment firms trading in risky financial products, Senate Banking Committee chairman Christopher Dodd presented the proposed legislation that would give the government new powers to break up firms that threaten the economy, according to the Associated Press (AP).
Specifically, the bill creates a nine-member Financial Stability Oversight Council that could place large financial institutions under the supervision of the Federal Reserve, and approve the break-up of large complex companies if they pose a “grave threat” to the financial system, the news provider further reported.
Moreover, the legislation includes language giving shareholders a nonbinding “say on pay” for company executives, according to NASDAQ.
However, commentators point out that the proposal falls short of the restructuring of federal financial regulations promised by President Obama or contained in legislation already passed in the House.
The Banking Committee is expected to formally debate and vote on it before a spring break.