After dozens of hearings and untold hours of discussion and debate, the House Financial Services Committee is close to moving a sweeping package of financial reforms to a larger vote.
Legislators are trying to create a regulatory framework with enough safeguards to prevent a repeat of last fall’s near collapse of the financial system, said U.S. Rep. Ed Perlmutter, D-Colo., who is a member of the committee.
The House has broken up its reform efforts into seven separate bills, five of which have moved out of committee and two of which are pending.
All should come up for a vote after Thanksgiving, said Perl mutter, of Lakewood.
One key reform Perlmutter has championed allows regulators to force firms to separate commercial banking from investment-banking functions.
“It allows institutions to fail without bringing the whole system down with them,” he said.
Perlmutter has also introduced a provision to study what some warn could trigger a future financial crisis: high- frequency trading.
He wants regulators to study risks to the system from rapid, high-speed trading done by computers and whether average investors are left at a disadvantage.
One of the most controversial changes Perlmutter is seeking would give the proposed Financial Services Oversight Council the ability to modify or suspend accounting rules if needed. “When there is a threat to the system, the rules change,” Perlmutter said.
Opponents fear that change would politicize accounting standards in ways that favored banks over other financial firms.
“We believe these proposed structures will increase the potential for political influence in the accounting-standard-setting process,” said Kathy Valentine, a spokeswoman from the CFA Institute, which represents 100,000 investment professionals worldwide.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
