Radical Suggestions
Amid the drawn-out between the White House and Senate GOP over the confirmation of financial policymakers, some spectators are calling on President Obama to get tougher.
Last week there was slight progress. Sen. Richard Shelby, the senior Republican on the Banking Committee, supported the nomination of Martin Gruenberg, the Federal Deposit Insurance Corp.'s No. 2, to lead the FDIC.
But others haven't fared as well. MIT professor Peter Diamond, nominated multiple times to be a Federal Reserve Board governor, finally withdrew as Shelby again challenged the nomination.
But two bloggers, The Atlantic's James Fallows and Merrill Goozner of Gooznews, said Obama should not back down. In what Fallows called "Appointment Jujitsu," they recommended the White House nominate Diamond for a more high-profile job: head of the Council of Economic Advisors, recently vacated by University of Chicago economist and Obama pal Austan Goolsbee.
"President Obama, here is your nominee. Like a Fed governor, a CEA chair requires Senate confirmation. But the fight for confirmation is one you should be willing to wage, rather than just letting the likes of Shelby exercise a veto again," Fallows wrote.
Goozner, who originated the idea, said the move "would be a stick in the eye" to the GOP.
Warren Warming to Senate Run?
Of course, no agency has felt the cold of the nominations freeze more than the Consumer Financial Protection Bureau. But while the White House remains undecided about choosing CFPB architect Elizabeth Warren to lead the bureau, Warren may already be looking for another job.
National Journal's Dan Friedman said in "Hotline On Call" that the Harvard professor, who is now advising the administration on building the CFPB, is believed to be more open to running for the Massachusetts Senate seat held by Republican Scott Brown.
Friedman said Warren was spotted dining in Washington last week with Charles Schumer of New York, the chamber's third-highest-ranking Democrat. Friedman wrote that Sen. Patty Murray, D-Wash., head of the party's Senatorial Campaign Committee, was said to be referring to Warren when telling reporters, "We expect to have a good, strong candidate within weeks." While prominent Massachusetts Democrats have already started campaigns, Friedman said, "D.C. Democrats appear to view none of them as major threats to Brown."
Frank's Valentine Card
It isn't often that Barney Frank, the lead Democrat on the House Financial Services Committee, relies on testimony from a large bank to make his point. But the Massachusetts Democrat repeatedly invoked Barry Zubrow, JPMorgan Chase & Co.'s chief risk officer, during a hearing last week.
Frank quoted Zubrow's written testimony several times as proof that Dodd-Frank had made key changes to the financial system, including regulating systemically important firms, forcing banks to clear derivatives trades and providing the government with the ability to unwind a large, systemically important company.
"I appreciate this acknowledgment," Frank said. "Those are all things that are in this bill and, as he notes, would have substantially lessened the likelihood of those institutions that were major failures and, as he notes, apply … all of the restrictions in the banking system to the unregulated. This is where the shadow banking system came in."
Frank also noted that Zubrow emphasizes that the U.S. is leading when it comes to regulatory reform. "This is not a case where he is complaining that America is different from the rest of the world," he said. "It's a case where he is boasting that together with the financial institutions, with Congress and the regulatory agencies, we're ahead of the rest of the world."
Frank's comments finally drew a response from House Financial Services Committee Chairman Spencer Bachus, who asked, "Was Morgan Chase's testimony inside a Valentine card?"
Dodd-Frank Kills Trees
A lot has been written about the ample pages in the Dodd-Frank Act. But at least one trade association is now highlighting another accomplishment of voluminous ink.
The Financial Services Roundtable announced Friday that it had passed the 100-letter milestone for comment letters filed in connection with Dodd-Frank rules. The total of 103 letters compares with an average of 12 to 14 comment letters filed per year before the passage of the financial reform law. (The Roundtable said 21 of the 103 letters were filed in coordination with other trade groups.)
"The scope of regulatory activity through Dodd-Frank has been just astounding," Steve Bartlett, the Roundtable's president and chief executive officer, said in a press release. "The fast pace of rulemaking will certainly continue as 109 final rules are due to be adopted in the third-quarter of 2011 alone, and we are not even at the halfway mark for the rules called for under Dodd-Frank."
