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Sen. Dodd Will Continue as Senate Banking Committee Chairman

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said that he would continue as chairman into the 111th Congress. He had considered chairing the Foreign Relations...
November 10, 2008

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said that he would continue as chairman into the 111th Congress. He had considered chairing the Foreign Relations Committee, taking over from Vice President-elect Joe Biden. Dodd outlined what he termed are several core principles in any comprehensive reform effort. The principles Dodd outlined included that regulators must be "strong cops on the beat," rather than turn a blind eye to reckless lending practices. He pointed out that Alan Greenspan also had conceded recently that the markets alone cannot be trusted to police themselves.

"We need to remove negative incentives for regulators to compete against each other for bank and thrift 'clients' by weakening regulation," Dodd said. "We cannot have a system that encourages charter-shopping and a regulatory race to the bottom in an attempt to win over institutions." He added that regulators should not have to fear losing institutions, and thus the source of their funding, by being good cops on the beat.
 
Dodd said all institutions that pose a risk to the financial system and taxpayers must be "carefully and sensibly" supervised, but while he declined to say whether he favored a single regulator or multiple agencies, he said that it is clear "that communication and information sharing among agencies must be streamlined and improved."
 
The financial system needs more transparency, he said. "We cannot afford to have trillion-dollar markets where there is little or no information about who owns or owns what. And we cannot afford to have regulators in the dark about the risks posed to and by the institutions under their watch."

Dodd said the goal was to "create a 21st century financial architecture - that spurs competition, and strengthens the ability of every sector of the financial industry - to succeed in a competitive global marketplace." He called for acceptance of the fundamental premise that consumer protection and economic growth are not in conflict. "If we learn nothing else from this crisis, it is that the failure to protect consumers can wreak havoc on the financial system."

From wire service reports.