US Rep Frank wants big banks to prepay resolution fund – aide

By Reuters Staff
October 30, 2009

U.S. Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee, listens to a reporter's question during the Reuters Global Financial Regulation Summit in Washington, April 28, 2009.  REUTERS/Jonathan Ernst (UNITED STATES POLITICS BUSINESS HEADSHOT)   WASHINGTON, Oct 30 (Reuters) – U.S. Representative Barney Frank has changed his position and supports requiring large financial firms to make payments into a fund for unwinding troubled competitors before the money is needed, an aide said on Friday.

The Democratic chairman of the House of Representatives Financial Services Committee unveiled legislation this week that called for case-by-case funding of government actions after they are taken to resolve problems at distressed firms.Committee spokesman Steven Adamske said Frank has changed his mind and is backing Federal Deposit Insurance Corp Chairman Sheila Bair’s argument that firms should prepay into an established fund, rather than pay case-by-case after the fact.

Financial companies with more than $10 billion in assets would be assessed to fund the proposed “resolution authority” program being proposed by Frank and the Obama administration. (Reporting by Kevin Drawbaugh; Editing by Dan Grebler)

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