As the Senate begins formal debate on the Democrats' financial regulatory reform bill today, here's a look at the key provisions being discussed, from the Associated Press:
- A nine-member Financial Services Oversight Council made up of the treasury secretary, Federal Reserve chairman, a presidential appointee with insurance expertise, heads of regulatory agencies and the head of a consumer protection bureau would monitor financial markets and watch for threats.
- A Consumer Financial Protection Bureau within the Federal Reserve would police lending, taking powers now exercised by various bank regulators. Those regulators could appeal bureau regulations to the oversight council.
- The Federal Reserve would lose supervision of thousands of banks but would police larger bank holding companies and large, interconnected nonbank institutions that the oversight council determines could pose a threat to the economy. With council approval, the Fed could break up large, complex companies that pose a grave threat to the financial system.
- Trades of derivatives, the complicated financial instruments blamed for accelerating the Wall Street crisis, would have to take place in regulated exchanges.
- Regulators would devise rules to prohibit bank holding companies with commercial bank operations from speculative trading on their own accounts. Large, interconnected companies would have to put more money in reserve.
- Shareholders would have the right to cast nonbinding votes on executive pay packages.