Sen. Chris Dodd (D-Conn.), the architect of the financial regulatory reform bill, just released a statement saying that he and Sen. Richard Shelby (R-Ala.) have reached an agreement on the “resolution authority” fund — a sticking point in bipartisan negotiations over the bill.
Here is the statement:
For over a year, Senator Shelby and I have been working on ways to end bailouts. And while we have had our differences in other areas, we have always shared a commitment to ensuring that taxpayers will never again be forced to bail out giant Wall Street firms that fail.
Last November, I tasked Senator Mark Warner of Virginia and Senator Bob Corker of Tennessee with producing an agreement on how to resolve failed companies.
They did a tremendous job. I want to commend both of our colleagues, they worked very hard to draft language that is part of the underlying bill. The package they produced would create effective oversight for large firms and make these firms pay for the risks they pose to our country and to the economy. Their agreement put a mechanism in place to guarantee that when large firms fail, they fail. The management is fired, creditors and share holders take losses, the company is liquidated, and taxpayers aren’t on the hook.
This is a complicated area, and a number of my colleagues on the other side of the aisle had reservations. And so I spent the last few months working with Senator Shelby to clear up any misconceptions people may have had, and otherwise address their concerns.
After weeks of negotiations, months really if you consider all of the work that has gone on on this piece of legislation over the last year, I am proud to say that the two of us have an agreement in this area and we intend to offer it as an amendment to the bill early this afternoon.
Let me go over the amendment.
These measures represent a fundamental change in our country’s ability to protect taxpayers from the economic fallout of having a large, interconnected firm collapse.
These measures will end the idea that any one company is ‘too big to fail.’
These measures will prevent large failing firms from holding our country hostage, extorting giant taxpayer funded bailouts under the threat of economic disaster.
And so today, we announce a few changes to the larger package.
With this agreement there can be no doubt that this Senate is unified in its commitment to end taxpayer funded bailouts.