Congress needs to step in and reform a banking industry that has caused a crisis of confidence in the stock market, the economy and the public, Sen. Christopher Dodd said on CNBC.
Dodd (D-Conn.) faulted an underregulated banking system for creating the problems that led to a lack of confidence in mortgage giants Fannie Maeand Freddie Mac, and said Congress will move quickly to address cracks in banking oversight.
"Fannie and Freddie are very solid institutions. They have more than adequate capital. They have access to capital markets," said Dodd, chairman of the Senate Banking Committee. "Obviously the fear that's been generated over the last number of days is not helping matters and I hope the actions taken over the weekend by the Treasury and the Fed are going to calm those concerns and we get back to Freddie and Fannie doing the incredibly important job of providing liquidity in a very bad market."
Republicans held up a reform bill aimed at government-sponsored enterprises, or GSEs, like Fannie and Freddie , according to the senator.
"We could have passed this bill, the GSE reform legislation, two and a half, three weeks ago but for a group of five or six Republicans who were opposed to this idea," Dodd said.
Dodd said Congress will be holding hearings in the coming days to decide how to proceed further.