Exclusive Interview: Rep. Barney Frank

Part Three

Rep. Frank discusses the backlash over Sarbanes-Oxley and the need to reform the law, lightening the regulatory burden on the banking industry, the decline in new listings on U.S. exchanges and concerns that excessive litigation is hampering business.

Banking  Regulation

The banking industry says it is suffering from "double regulation" because of Sarbanes-Oxley and reporting requirements mandated under the Patriot Act.

"I think we have overdone it," says Frank. "I want law enforcement to be able to protect us from terrorists and their financing. But you know I think what we have done. We have overreacted and they are required to send much too much information."

Sarbanes-Oxley

"We are going to reduce Sarbanes-Oxley for everybody. Banks do have a legitimate issue here they are the only set of industries. In fact, it turns out and I didnt realize it at the time, the key section of Sarbanes-Oxley, section 404, was apparently taken from a law called FIRIA, which was what was passed after the S&L crisis to try to prevent things and it did effectively help stave off any similar crisis in commercial banks. So commercial banks are already subject to that and i think they have a good case and I'm going to try to thin that down."

Part Four

Rep. Frank discusses being gay and being a public official, his relationship with a prostitute and a formal House reprimand in 1990, as well as his passion for politics and a legislative career following capitalism.

Personal Life

"In 1987 I volunteered to the "Boston Globe" that I was gay, They wanted to ask me but they were afraid to ask me and I gave them permission to ask me and they asked me and I acknowledged that I was gay in May of 1987. And I frankly, previously I was afraid that it would have a lot of negative consequences. It didn't. I overestimated that. Two years later or two and three months after than in 1989, there was a male prostitute that I had been involved with. Listen, one of the reasons I came out was its very hard to be a closeted prominent gay person, You can be closeted and gay because you can have a private life that is separate from your career. When you're somewhat prominent as I became as a member of Congress, it's hard to do that and consequently I did stupid things. I’m not looking for excuses. I did them voluntarily stupid things including using prostitutes."

Capitalism

"I think I understand capitalism better than some of the conservatives, because if you read Adam Smith he never said there was any need for work and there is this doctrine of market failure which is a legitimate economic doctrine. What you understand is what capitalism can and cannot do. I honestly believe, I think that American capitalism is a lot stronger than a lot of conservatives think.

Economics

"Economics always interested me as soon as i discovered it in college. I'm not good in math. I am better verbally so i took as much economics as possible in college without being a great mathematician.... Today economics has gotten more mathematical. So i was always interested in economics and I've always had I think a pretty good understanding of the capitalist system which understands both its strengths and where it doesn't really have a role."