This week is a week of talking and talking and talking about the financial crisis and how to fix it. Two versions of a stimulus bill now exist and must be reconciled as they circulate Congress. Meanwhile, the first soft notes of regulatory restructuring will sound, and lawmakers will face off over what the rapidly dwindling Tarp program should really accomplish.
Round one of the House Committee on Agriculture´s hearings on a draft bill for regulating derivatives will begin at 10:30am. The bill imposes reporting requirements on derivatives traders and dictates that many kinds of derivatives currently traded over-the-counter be cleared by a central party. It also beefs up the Commodity Futures Trading Commission. Could this be the beginning of the latest battle between the CFTC and the Fed for authority over derivatives?
House Financial Services Committee Chairman Barney Frank, D-Mass., is holding a press conference at 11am to discuss his goals for the year.
Starting at 2pm, Rep. Frank will preside over a hearing called "Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners, and other Enhancements." The hearing is being held in anticipation of a bill the committee will consider the following afternoon. Witnesses haven´t been announced but if there´s any serious talk of Hope For Homeowners, Federal Housing Administration Commissioner Brian Montgomery is sure to be there. He must be just about the only person who thinks about the failed FHA program these days.
Round two of the derivatives regulation hearings kicks off at 10:30am in the House ag committee. No witnesses will be announced until 24 hours before the hearing.
House Financial Services´ subcommittee on capital markets will hold a 10am hearing looking at the regulatory failures in the Ponzi scheme perpetrated by the New York investor Bernard Madoff. A similar hearing was held during the first week of January, before Congress officially reconvened, but one of the key witnesses, Harry Markopoulos, who called the scheme to the attention of the Securities and Exchange Commission years ago, cancelled his appearance at the last minute, saying he needed more time to prepare. A witness list for the latest hearing hasn´t been released yet, but Mr. Markopoulos is almost sure to be on it.
Then at 2pm, the entire Financial Services Committee will hold a markup on H.R. 703, a bill "to promote bank liquidity and lending through deposit insurance, the HOPE for Homeowners Program, and other enhancements."
At 2pm, the Senate Banking Committee will convene a hearing on modernizing the US regulatory system. Paul Volker, a former Fed chairman, and now the chairman of the President´s Economic Recovery Advisory Board, will testify along with the acting comptroller-general for the General Accountability Office, Gene Dodaro. Let´s hope Mr. Volcker offers more specifics on reforms than he did at a Jan. 16 press conference held by the Group of 30 in New York.
The Federal Deposit Insurance Corp. is holding a meeting of its Advisory Committee on Economic Inclusion, designed "to provide advice and recommendations on initiatives to expand access to banking services by underserved populations." The topic for this meeting isn´t much more specific than the general purpose of the group: The FDIC´s Website says the committee "will focus on strategies to increase access to the financial mainstream." A schedule is available here.
Mr. Dodaro will be back in the Senate Banking Committee at 10am to talk about overseeing Tarp. His fellow witnesses are the Tarp inspector general, Neil Barofsky, and Elizabeth Warren, who chairs Tarp´s Congressional Oversight Panel.