Frank Statement on Paulson Plan

Washington, DC - Rep. Barney Frank, chairman of the House Committee on Financial Services today released the following statement regarding Treasury Secretary Paulson's plan:

"Secretary Paulson’s plan fundamentally to improve our ability to regulate the financial system is a very constructive step forward in this important debate.  He recognizes that the far-reaching innovations that have transformed financial activity have outstripped our ability to preserve economic stability and that both our regulatory institutions and the rules they apply must be significantly enhanced.
 
"We have not yet analyzed the proposals in detail, and I have disagreements with some specifics—e.g. the plan goes too far in diminishing the role of the states, and not far enough in conferring needed new powers on the Federal Reserve over non-bank financial institutions for which they now have greater responsibility. 
 
"But given the fact that is a contribution to a profound national discussion that cannot be concluded in the months before the election, Secretary Paulson has performed an important service.  By rejecting the argument for the status quo; by making it clear that new regulation done properly enhances the function of the market rather than detracts from it; and by explicitly including consumer protection among the core functions of the system he proposes, he has narrowed, albeit by no means removed, the differences between his position and that of many Democrats.
 
"I am, consequently, more hopeful that we will be able ultimately to achieve our common goal of a regulatory regime that allows the private sector to flourish in a framework that provides safety, soundness and stability."