House Financial Services Committee Chairman Barney Frank (D-Mass) wants to authorize the proposed systemic risk council to limit the activities of too-big-to-fail financial holding companies and to shrink them, whether they are healthy or failing.
But the council would not have the power to dissolve institutions that are sound, Frank said at a press conference Tuesday.
Frank said he favors creating a standing fund to cover the cost of resolving teetering TBTF entities, using ongoing assessments from holding companies, including insurers and banks, with over $10bn in assets. He would not estimate how big he thought the pool should be, but he said it should not have to reach the hundreds of billions of dollars.
The fund should be able to borrow from the Treasury Department if it runs out of money, but Frank said the loans would have to be repaid from assessments, adding that he hopes the need to collect the assessments would eventually end.
Frank said the council would classify
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