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Rep. Frank Pushes For Prosecutions Over Meltdown

In an interview with CNBC, Representative Barney Frank says he wants to push for prosecution of the people who caused the country's financial meltdown.

The Massachusetts Democrat says he has no specific targets in mind, but says the most significant thing lawmakers can do is make past bad practices illegal.

Frank also said that he was glad some U.S. banks had been returning government TARP money and said that was a sign that the banks were feeling more stabilized.

Earlier in the day, Frank, who is chairman of the U.S. House Financial Services Committee, told reporters that he plans to move legislation this month on mortgage origination, predatory lending and credit cards.

Barney Frank
AP
Barney Frank

Vowing to turn his focus from stabilizing the financial system to reshaping it, Frank said he will hold hearings to examine creating "a strongly empowered systemic risk regulator."

Hearings are set for March 17, 20, 24 and 26.

Frank has said in the past that he expects the Federal Reserve may be handed the new role of monitoring the financial system for risk.

Some lawmakers are concerned such duties could distract the Fed from its core role as manager of the nation's monetary policy.

"While we will continue to work with the Obama administration on stabilization, it is now essential that we continue work on our reform agenda and address the need for financial regulatory restructuring," Frank said in a statement distributed ahead of a news conference.

"Perhaps most importantly, the American public has the right to know what enforcement actions are contemplated against those irresponsible and, in some cases, criminal actions that lead to the current situation," he said.

(See video for full CNBC interview with Frank)

At a House financial services subcommittee hearing on Thursday, Wall Street groups agreed there should be one one risk regulator but were split on who should have that role.

The Financial Services Roundtable, which represents the largest financial services firms, advocates giving the Fed the responsibility for looking across the entire financial system and identifying risks.

But the Securities Industry and Financial Markets Association, said it has not decided whether the Fed should play that role.

The National Association of Insurance Commissioners, a collection of state regulators, oppose the creation of one super regulator.

And some key lawmakers have reservations giving the Fed more powers, citing potential conflicts with the board's current responsibilities of setting monetary policy and supervising banks.

"Are any of you troubled with giving the Fed so much power?" asked Alabama Rep Spencer Bachus, the top Republican on the full House Financial Services committee.

Lawmakers at the subcommittee hearing also expressed reservations about rushing ahead with a plan to create a systemic risk regulator.

"We have to get this one right. We can't just hurry to expeditiously conclude something that appears to be a fix, when it does not accomplish something of a significant nature," said Pennsylvania Rep Paul Kanjorski, the Democratic chairman of the House subcommittee on capital markets and insurance.

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