Dodd Calls Obama Plan Too Grand

[The Northerner]

Source: New York Times

WASHINGTON — The chairman of the Senate Banking Committee warned on Tuesday that the Obama administration’s new proposals to rein in Wall Street firms ran the risk of derailing months of delicate negotiations over overhauling financial regulations.

“It’s not a movable feast,” the chairman, Christopher J. Dodd, told Paul A. Volcker, the former Federal Reserve chairman who has become an influential outside adviser to President Obama. “It’s adding to the problems of trying to get a bill done,” he said at the end of a hearing on the proposals, after all the other committee members had already left.

Mr. Dodd, Democrat of Connecticut, added that the administration was “getting precariously close” to excessive ambition for the legislation. “I don’t want to be in a position where we end up doing nothing because we tried to do too much,” he said.

The hearing was the first formal Capitol Hill discussion of Mr. Obama’s two proposals. One would ban banks that use federal deposit insurance and the Federal Reserve’s discount window from engaging in proprietary trading — making market bets using their own money. They also would not be able to own hedge funds and private equity funds. The other would seek to bar further consolidation among financial institutions by capping the future size of any firm.

Read more: http://www.nytimes.com/2010/02/03/business/03regulate.html