To Be Frank …

House Financial Services Committee Chairman Barney Frank was clearly ready last week for the year to be over.

After passing a major overhaul of the financial system — a process that took months — he appeared to have little patience for a hearing on expanding the use of covered bonds in the U.S., though he supports the idea.

Frank skipped an opening statement entirely, and often appeared distracted during the hearing (at one point, he appeared to be reading a newspaper). He also tried to use the hearing to rebut Republican arguments against his reform bill, which had already passed.

At another point, the Massachusetts Democrat asked witnesses whether government interventions had been helpful during the crisis.

When J. Christopher Hoeffel, a managing director at Investcorp International Inc., the parent of SourceMedia Inc., American Banker's publisher, started to answer that the actions had created demand for securities but failed to inspire new lending, Frank cut him off.

"I understand that," he said. "To the extent it has had an effect, it's been a beneficial effect. Because there have been people who have been very critical … . Would you have them stop now?"

When Hoeffel qualified his response, saying, "they don't need to continue indefinitely," Frank cut in: "Well, indefinitely, I would agree. Nothing should continue indefinitely, like this hearing."

When another witness remarked that "significant asset-liability mismatches were the source of problems" with the rating agencies, Frank couldn't help but note that he was pointing out the obvious.

"I want to make sure I understood you. You're saying that the rating agencies learned as a part of their experience that a severe mismatch between assets and liabilities was a bad thing? Is that what they learned last year?"

When the witness answered "yes," Frank replied with mock solemnity, "Wow."

Guilt by Association

Leave it to Sen. Jim Bunning to spoil what is an increasingly rare thing for the Federal Reserve Board: a good news day.

A day after Time magazine named Fed Chairman Ben Bernanke its 2009 "Person of the Year," Bunning, a Kentucky Republican well known for his animosity toward the central bank, reminded Bernanke of others who have received that designation.

"Chairman Bernanke may wonder if he really wants to be honored by an organization that has previously named people like Joseph Stalin, Yasser Arafat, Adolf Hitler, the Ayatollah Khomeini and Vladimir Putin as their Person of the Year," Bunning said as the Senate Banking Committee considered Bernanke's nomination to another four years at the Fed's helm.

"I congratulate him and hope he at least turns out better than those guys."

But Bunning was not taking any chances. As expected, he voted against Bernanke's nomination, which the committee did approve on a 16-to-7 vote.

Rise and Fall

Bernanke is not the only regulator having a hard time of late.

Though regulatory reform has yet to pass in the Senate, Frank was already planning who would run certain agencies — and who would not.

The House bill would create a consumer protection agency, which would be run by a director for the first two years and a commission after that.

After House approval of the bill, Frank made it clear he hopes Elizabeth Warren, the Harvard law professor in charge of the Congressional Oversight Panel, which is a watchdog for the Troubled Asset Relief Program, would be the first director of the Consumer Financial Protection Agency.

While praising her, though, Frank took some shots at Comptroller of the Currency John Dugan, who he said should not run the national bank regulator, which under the House bill would meld the OCC and Office of Thrift Supervision.

"There are two very important initial appointments, the national bank regulator and the consumer agency," Frank said. Though recommending Warren for the latter, he said he had ruled out Dugan for the former.

"I know who I wouldn't like to see: Mr. Dugan. I thought on both preemption and consumer protection that it's clear that there are some real philosophical differences," he said.

Asked whether OTS acting Director John Bowman was up to the job, Frank said he had not even considered it.

"Nobody has really thought much about him."

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