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July 25, 2008 5:21:29 PM CDT

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Lawmakers Gird for Battle Over Wall Street Reforms

Posted Mar 23, 08 8:04 AM CDT in Politics,  Business 

(Newser) – Lawmakers are debating how to regulate and oversee financial institutions to prevent another Bear Stearns near-catastrophe. But exactly what that solution should look like depends on who's doing the proposing. President Bush and Wall Street say that Washington's heavy hand could hamstring the industry’s ability to innovate, reports the New York Times. Democratic lawmakers contend it’s time to tighten controls to prevent future meltdowns.

A key issue is liquidity. Democrats want investment banks and lenders to have more cash on hand. Republicans argue that keeping capital reserves high tightens credit markets. Both sides want tighter oversight and agree that current regulatory agencies—a veritable alphabet soup of sometimes competing bodies—may be overwhelmed and ill conceived.

Source New York Times

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A flag flies in front of Bear Stearns' Madison Avenue offices.   (Getty Images)
People walk past the New York Stock Exchange.   (Getty Images)
Lawmakers are struggling deciding how much control Wall Street needs.   (Getty Images)
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Congress  • recession  • Wall Street  • Bear Stearns  • Goldman Sachs  • regulation


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