NEWS

Reuters correspondents Kevin Drawbaugh and Karey Wutkowski report that the U.S. House Financial Services Committee cleared on December 2 legislation to limit systemic financial risks, paving the way for House floor consideration of financial reform legislation next week

“In a milestone for the Obama administration’s push to tighten bank and capital market oversight, the panel approved a bill aimed at reining in firms deemed ‘too big to fail’ in order to prevent debacles like Lehman Brothers’ collapse last year and the financial crisis and government bailouts that ensued.

“To tamp down the risk a financial firm’s collapse might imperil the entire financial system, the bill also proposes a ‘resolution’ system for dealing with, and potentially breaking up, troubled firms so taxpayer bailouts are no longer needed.”

For details on “The Financial Stability Improvement Act” (H.R. 3996) go to: http://financialservices.house.gov/pdf/Summary_hr3996.pdf.

For details on “The Federal Insurance Office Act” (H.R.2609), go to: http://www.house.gov/apps/list/press/financialsvcs_dem/pressfio_120209.shtml.